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Aluminium Prices Stable for First Time in Five Years: Rusal
The aluminium market will plateau at between US$1,600 and US$1,700 per metric ton if stockpiles continue to empty, demand continues to increase, and production from the People’s Republic of China does not ramp up production. This is the opinion of Russian Federation aluminium major Rusal, as stated to Reuters Russia Investment Summit in Moscow by Deputy Chief Executive Oleg Mukhamedshin on Friday.
“The aluminum market has in fact found its stabilization point this year for the first time in five years,” he explained to the assembled audience.
“We expect the global deficit to be 700,000-800,000 tonnes this year. The figure is quite symbolic, taking into account expected consumption of 60 million tonnes. It is important because it shows the market is pulling out of the situation of excessive production,” Mukhamedshin said.
Rusal has been busy increasing capacity over the past several months, firing up its Boguchansk smelter in Siberia, which has a nameplate capacity of 147,000 metric tons. Mukhamedshin revealed that the firm is also attempting to organize a coalition of foreign and domestic banks to raise US$800 million in order to launch its Taishet project. The project anticipates an addition of 430,000 metric tons to Rusal’s overall capacity by the close of 2018. Planned capacity has been pared down from the originally planned 960,000 metric tons since work on the smelter began in 2007.
“About $800 million has already been invested in the Taishet project, and construction works were active there before the financial crisis of 2008 … If we do not want to write off this money, construction must be completed,” he said.
Mukhamedshin went on to say that the effort at raising Boguchansk’s nameplate capacity to 300,000 metric tons is on schedule, but that will be the final capacity upgrade there if Taishet comes to fruition.
“The capacity which we are slowly launching is in the horizon of more than three years, this metal will be supplied to Russia’s domestic market. This should not have any effect on price outside Russia.”
He concluded by saying that Rusal expects its sales in Russia and the CIS to increase by seven to eight percent next year. The firm expects to keep 2017 production levels static at approximately 3.68 million metric tons.
Source: Aluminium Insider