Global aluminium demand will rise 6% this year, stretching supplies of the light metal after production cutbacks, UC Rusal has claimed.
The world’s biggest aluminium producer expects demand growth to accelerate amid “positive signals of returning confidence across all key sectors and markets”, ceo Oleg Deripaska said in a statement on Tuesday February 18.
“China and other Asian economies are expected to grow strongly and the developed markets including the US and Europe should continue to show a healthy growth,” he said.
He also saw an expanded deficit in the light metal for the coming year, as “ex-China aluminium market deficit will grow from 570,000 tonnes in 2013 to about 1.4 million tonnes in 2014,” while aluminum premiums will remain “well supported” due to strong financial and physical demand.
He attributed the predictions to “the full impact of the production cuts, backed by growing consumption demand”.
Rusal itself reported 3.86 million tonnes of aluminium output for 2013, a decrease of 8% from 2012. Its alumina output totalled 7.31 million tonnes in 2013, down 2% from the previous year. Its bauxite production totalled 11.88 million tonnes in 2013, a decrease of 4% from 2012.
“While demand fundamentals remain robust, it is vital that the supply side continues its disciplined approach to production. This will take time but there is no doubt that the industry is on the right path towards environmentally friendly and economically efficient production,” he said.
Rusal’s production cut is a result of the curtailment program for inefficient capacity announced in the third quarter of 2012 and updated further in September 2013 on the back of prevailing unsupportive economic situation in the industry.
The decrease in its aluminium output was due to gradual mothballing of production at most of its aluminium smelters located in European part of Russia, as well as ALSCON (Nigeria).
The aluminium output decrease was also supported by smelters located in Siberian Region (Russia), where production rationalization was performed mainly through amperage reduction, the company said.
“2013 witnessed the supply side adopting a disciplined approach to production, with Rusal successfully completing its production cut programme which resulted in cuts of 316,000 tonnes, or 8%, compared to 2012. Reduced operational levels are expected to be sustained throughout 2014 as Rusal remains at the forefront of creating an efficient supply side dynamic,” Deripaska said.