Rusal’s 2018 Aluminium Output Up 1.3%, Expects Demand And Prices To Grow In 2019

Russia’s Rusal released its 2018 numbers, showing aluminium production rose by 1.3 per cent year-on-year to 3.8 million tonnes. Following the announcement, the company’s shares increased by 12 per cent, and hit a 10-month high. Rusal expects aluminium demand to continue to grow and predicts rising prices this year.

The share of value added products (VAP) in total sales fell to 45 per cent from 47 per cent. Rusal said the average price for aluminium in 2018 went up by 7.3 per cent to $2,259 per tonne. However, the last quarter saw the price decrease by 7 per cent to $2,115 per tonne due to trade tensions between US and China.

Faced with the threat of US sanctions last April, Rusal’s sales volume fell 7.2 per cent in 2018 while the company’s plant utilisation rate remained stable at 96 per cent in the second half of the year. This January, the company reached an agreement with the US Treasury to remove sanctions and the London Metal Exchange lifted restrictions on Rusal-branded metal.

“The company was operating under the sanctions for the majority of 2018. These circumstances coupled with other factors … led to certain changes to ordinary levels of operational performance,” Rusal said in a statement.

Releasing the annual results, Rusal highlighted that the global aluminium market was in deficit and the price for aluminium would go up due to lower LME stocks and the fall in Chinese aluminium production.

“The aluminium market is in heavy deficit and demand is set to improve, the aluminium price has upside potential,” Rusal said.

Rusal pointed out that the aluminium market could face supply disruptions and increasing production costs at the time when about 50 per cent of plants outside China and 60 per cent in China are operating at a loss.