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Rusal Chief:global Aluminum Supply Will Be Tight Aluminum Prices Will Rebound

Apr 26, 2016

Moscow, April 24, the world's second largest aluminum producer, Russian Aluminum (Rusal) CEO Vladislav Soloviev said that global aluminum demand will remain strong, supply countries outside China will continue tightening this year, the aluminum from nearly seven-year lows to create the conditions.

Chinese exports of aluminum products this year will also slow down, due to the overseas market than the domestic market premium narrowed.

Soloviev said: "RUSAL expects global aluminum consumption will increase by 5.7% to 59.5 million tons forecast strong growth in Chinese consumption will increase by 7% year on year to 31 million tons.."

Soloviev expected, automotive and aerospace and other transportation equipment industry is still the leading power demand, followed by construction, electronics, durable goods and packaging industries.

From the supply perspective, China's net production capacity will be overshadowed by other parts of the refinery closed in.

Soloviev said: "We expect the next five years, China will not have a lot of countries other than the new capacity appear, this year's supply gap is expected to increase significantly, may more than 2.4 million tons."

Rusal believes that if the current price slump continues, countries other than China's production capacity of 1 million tons will be idle.

In China, aluminum production capacity is expected to increase this year more than doubled to 1.5 million tonnes, mainly due to limited production and reduced levels of new refinery production.

Soloviev said that if aluminum is less than 12,000 yuan per ton, compared with 50% of the spare capacity is unprofitable, it will not restart.

He said that although China's domestic aluminum prices, but raw materials and semi-finished bauxite alumina prices will inhibit the restart of idled capacity.

Signs that supply chain inventory rebuilding and stabilizing economic growth slowdown, boosted aluminum prices rebounded more than 10 percent over the past month to $ 1,635 a tonne, the six-month high, but still far from the seven-year lows.

According to data analysts, Chinese aluminum output last year increased by 10.3%, lower than the 12.8 percent increase in 2014, and for the fourth consecutive year of growth slowed.