UC RUSAL to Cut down on Production

Rusal made its aluminum price forecast for 2012 more moderate: the figure dropped from $2,200 to 2,400 per ton to $2,100 to 2,200, says the company’s First Deputy Director-General Vladislav Solovyev.

‘The market situation is quite complicated at the moment; not only the aluminum but all commodities, in fact, including oil, are enjoying less demand. Things are unstable in Europe, and investors are backing out of risk-prone assets. We feel it is time to prepare for a prolonged recession,’ Kommersant quotes Solovyev as saying.

A ton of aluminum cost $1,800 at LME yesterday; the average price since the beginning of the year has comes to $2,100 against $2,400 on the year 2011. At the same time, the company is looking into the ways of cutting back on production. The company’s Director-General and primary proprietor Oleg Deripaska first voiced these plans in late January, but he only spoke about cutting production by 6% over the next eighteen months at the time (due to closing down unprofitable facilities, that is). Later on, he mentioned a possible decrease by 300,000 to 600,000 tons, the newspaper says.

UC RUSAL made its plans more specific the other day: starting from June and until the end of the year, the company might cut its aluminum production by 150,000 tons. The decrease could come to 250,000 to 300,000 tons by the middle of 2013. All in all, the production is supposed to drop by 350,000 to 400,000 tons or 8% to 10%, but no specific deadlines have been set yet.

The final decision will be made in August or September 2012.

As a matter of fact, quite a few enterprises belonging to RUSAL operate in Sverdlovsk Region at the moment, including Bogoslovsky and Uralsky smelters.

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