AIRLINK 81.10 Increased By ▲ 2.55 (3.25%)
BOP 4.82 Increased By ▲ 0.05 (1.05%)
CNERGY 4.09 Decreased By ▼ -0.07 (-1.68%)
DFML 37.98 Decreased By ▼ -1.31 (-3.33%)
DGKC 93.00 Decreased By ▼ -2.65 (-2.77%)
FCCL 23.84 Decreased By ▼ -0.32 (-1.32%)
FFBL 32.00 Decreased By ▼ -0.77 (-2.35%)
FFL 9.24 Decreased By ▼ -0.13 (-1.39%)
GGL 10.06 Decreased By ▼ -0.09 (-0.89%)
HASCOL 6.65 Increased By ▲ 0.11 (1.68%)
HBL 113.00 Increased By ▲ 3.50 (3.2%)
HUBC 145.70 Increased By ▲ 0.69 (0.48%)
HUMNL 10.54 Decreased By ▼ -0.19 (-1.77%)
KEL 4.62 Decreased By ▼ -0.11 (-2.33%)
KOSM 4.12 Decreased By ▼ -0.14 (-3.29%)
MLCF 38.25 Decreased By ▼ -1.15 (-2.92%)
OGDC 131.70 Increased By ▲ 2.45 (1.9%)
PAEL 24.89 Decreased By ▼ -0.98 (-3.79%)
PIBTL 6.25 Decreased By ▼ -0.09 (-1.42%)
PPL 120.00 Decreased By ▼ -2.70 (-2.2%)
PRL 23.90 Decreased By ▼ -0.45 (-1.85%)
PTC 12.10 Decreased By ▼ -0.89 (-6.85%)
SEARL 59.95 Decreased By ▼ -1.23 (-2.01%)
SNGP 65.50 Increased By ▲ 0.30 (0.46%)
SSGC 10.15 Increased By ▲ 0.26 (2.63%)
TELE 7.85 Decreased By ▼ -0.01 (-0.13%)
TPLP 9.87 Increased By ▲ 0.02 (0.2%)
TRG 64.45 Decreased By ▼ -0.05 (-0.08%)
UNITY 26.90 Decreased By ▼ -0.09 (-0.33%)
WTL 1.33 Increased By ▲ 0.01 (0.76%)
BR100 8,052 Increased By 75.9 (0.95%)
BR30 25,581 Decreased By -21.4 (-0.08%)
KSE100 76,707 Increased By 498.6 (0.65%)
KSE30 24,698 Increased By 260.2 (1.06%)

Russian aluminium giant Rusal plans to keep output largely flat for three years because healthy stock levels will ensure the market is supplied despite market deficits, a top executive said on Wednesday. Robust aluminium prices have prompted some Chinese smelters to abandon production cutbacks and some investors fear restarts at other plants would chip away at what was expected to be the first global deficit after years of oversupply.
"We still have enough stocks on the market, so we don't see any reason to restart production," Oleg Mukhamedshin, deputy chief executive, told Reuters in an interview. "I see production flat, stable for at least three years." Surpluses over the past several years have left the global market awash in inventories, including about 4.5 million tonnes at warehouses monitored by the London Metal Exchange (LME) and at least an equal amount in non-LME storage depots, analysts say.
Oversupply in past years has weighed on the LME benchmark aluminium price, which has shed nearly 30 percent since touching a peak of $2,803 a tonne in May 2011. The weak prices prompted cutback by producers, including Rusal, which has cut capacity by 12 percent or 650,000 tonnes since 2012. It was not attractive to restart many of the plants because they are old and outdated, he added.
United Company Rusal Plc, the world's biggest aluminium producer, had potential for 150,000 tonnes of new capacity from a new project by the end of next year, Mukhamedshin said. Looking at the global market, he said restarted capacity in China was not a worry because the output was being absorbed by buoyant consumption there, which is expected to jump 13 percent this year to 28 million tonnes.
The combination of strong global demand from the auto and aerospace sectors plus capacity cutbacks has led to the market moving to a deficit of 1.4 million tonnes this year, Rusal has said. Mukhamedshin said higher dividends from Norilsk Nickel would help Rusal to reduce its debt burden. Norilsk, part owned by Rusal, said on Wednesday its management had recommended to pay $2.78 billion in interim dividends for the first nine months of 2014.
Norilsk, the world's largest nickel and palladium miner, paid $2.1 billion in dividends for 2013 and will add more than $400 million from asset sales to its interim 2014 dividend, its deputy CEO said on Tuesday. "Our prime target balance sheet-wise is continued deleveraging," he said. "The dividend from Norilsk will be used to reduce the debt outstanding." Half of Rusal's $10 billion of net debt is secured by Norilsk shares, and it aims to cut the remaining $5 billion to $3 billion-$4 billion within about two years, Mukhamedshin said.

Copyright Reuters, 2014

Comments

Comments are closed.