Rusal keeps bullish tone on metal

UC Rusal （0486）, the world's largest aluminum maker, is optimistic about a sustained growth in prices of the metal.

"The aluminum market is very balanced as we can see export prices have reached a historic high," deputy chief executive Oleg Mukhamedshin said.

The premium from exporting to Europe rose to US$160-US$180 （HK$1248-HK$1404） per tonne while that for exports to Japan jumped to US$130 per tonne over the average London Metal Exchange cash price on costs, he said.

"The physical market is very tight. As the Chinese government raised electricity prices to reduce consumption of energy, more smelters have shut down production," he said.

Negotiations with Shanghai Metal Exchange to trade Rusal's aluminum through the city bourse is still pending, considering the price difference of aluminum in the mainland and international prices, Mukhamedshin said.

"We think it is not the right time to sell aluminum at a discount," he said in Hong Kong yesterday. As for the proposed yuan bond issuance by the Russian aluminum giant, Mukhamedshin said the company will meet investment banks and investors to study the market first. "The proceeds will be invested in the mainland, mainly to fund the Shanxi plant and raw material costs."

Rusal will "hopefully" launch its Russia depositary receipts by the end of this year to obtain a position on the MSCI index. Rusal is in talks with Vnesheconombank, one of its creditors, about organizing the RDR listing. MANDY LO