Minews 4 Feb 2015 20:55 http://www.minews.ir/en/doc/news/20870/rusal-to-keep-idled-plants-shut-regardless-of-aluminum-price -------------------------------------------------- Title : Rusal to keep idled plants shut regardless of aluminum price -------------------------------------------------- Text : (Minews) - United Co. Rusal, the world s largest aluminum producer, will keep 700,000 metric tons of output it idled in 2013 and 2014 permanently shut, helping to buoy prices of the metal. We cut production to 3.6 million tons last year and we are not planning to reopen the mothballed capacity, regardless of the price,” Chief Executive Officer Vladislav Soloviev said in an interview in Moscow this week. Those plants were the least effective among our assets, so we are dismantling them now.” Aluminum prices rose about 13 percent in the last year, and the market, excluding China, expanded by 7 percent. Rusal sees similar growth this year, with a deficit outside the Asian nation of about 1.1 million tons. The company, which had annual capacity of 4.5 million tons before idling plants, doesn t expect other major producers around the world to increase output. Our current output will remain stable with some minor increase expected once we start the Boguchansk smelter,” Soloviev said. The opening is planned in the first half of this year, possibly late April, he said. The Siberian smelter will produce a maximum of 25,000 tons to 30,000 tons this year and reach initial planned capacity of 147,000 tons in 2016. The output from Boguchansk will all be sold in Russia as the company expects the local market to expand to 2.2 million tons annually by 2020 from as much as 800,000 tons now, Soloviev said. Rusal doesn t expect a significant increase in exports from China, because of an existing tax policy that promotes value-added products over semi-finished aluminum. Some exporters have found ways to work around the policy, Soloviev said, but we think China will solve the issue as it s losing money on it,” he said. Overall we see quite insignificant increases in China s semi-finished product, which won t put any large pressure on the global market and pricing.” China is the largest consumer of aluminum and is self-sufficient. The premium that buyers pay to obtain aluminum in Europe fell to $380 to $390 a ton last week from $420 per ton in December, according to CRU Group in London. Rusal sees the premium rising, although it won t be such a dramatic growth as we saw before,” according to Soloviev. The London Metal Exchange aluminum price is still under pressure from speculative investors -- that s why we now see it back to $1,800 per ton,” he said. Rusal maintains its 2015 forecast of an average price of $2,000 a ton, he said. Declining inventories will support the price, according to Rusal. The LME stockpiles are decreasing and we have a chance to see them below 4 million tons in the very near future. Non-official stock is decreasing too, and we estimate it at about 3 million tons to 4 million tons.” Rusal, which also idled alumina assets in Europe, Jamaica and Guinea, doesn t plan to reopen them this year, according to the CEO. We would like to see more healthy alumina and bauxite markets,” he said. We think that the fair price for alumina should be $450 a ton and for bauxites, $110 a ton, not $340 and $60 respectively as we have now.”