Rusal Sees Aluminum at $4,000 Next Year on Car Orders

March 27 (Bloomberg) -- Aluminum prices will rise to a record $4,000 a metric ton as early as next year as environmental concerns push automakers to use more of the lightweight metal to improve fuel efficiency,the head of the world's biggest producer said.

"Aluminum will be a beneficiary of global warming as it is a light metal:Perfect for mobility," Alexander Bulygin,chief executive officer of United Company Rusal,said today in a telephone interview in Moscow.

United Company Rusal,66 percent owned by billionaire Oleg Deripaska,became the industry's biggest producer today after completing a merger between OAO Russian Aluminum,domestic rival OAO Sual Group and the alumina assets of Swiss trader Glencore International AG. Aluminum futures traded at a record $3,310 a ton in London in May.

Another factor supporting prices is the growing demand from China,the world's largest user,Bulygin added. "I am convinced that China must become a net importer of aluminum this year," he said.

Scarcity of affordable electricity and a lack of access to new technology will also drive prices higher and lead to consolidation in the aluminum industry,Bulygin said.

To keep electricity costs low,United Company Rusal is in talks to secure supply contracts with OAO Hydro OGK,the country's largest hydropower producer. Prices will be pegged to metal prices,Bulygin said.

United Company Rusal also has the option of securing 10- to 15-year contracts with affiliated power companies controlled by Deripaska. The company doesn't plan to bid for existing power generators and will focus on building its own gas-fired and coal-fired capacity,he said.