Moscow, Feb 14, 2011 - （ACN Newswire） - UC RUSAL （SEHK: 486, EuroNext: RUSAL/RUAL, MICEX: RUALR, RTS: RUAL）, the world's largest aluminium producer, announces its key production data for 2010.
Key highlights:
-- Total aluminium output amounted to 4,083 thousand tonnes in 2010, an increase of 3% as compared to 2009.
-- Alumina output totalled 7,840 thousand tonnes in 2010, an increase of 8% as compared to 2009.
-- Bauxite production totalled 11.8 million tonnes in 2010 and increased by 4% as compared to 2009.
-- Nepheline production increased by 9% to 4.9 million tonnes in 2010 compared to 4.4 million tonnes in 2009.
-- Aluminium foil and packaging production volume increased by 17% to 81.4 thousand tonnes in 2010 compared to 69.8 thousand tonne in 2009.
-- RUSAL plans to increase production of aluminium by 2% in 2011,compared to 2010. The increase is expected to include an increase in production at the Siberian smelters in Russia.
-- RUSAL expects to increase alumina output by 8% in 2011 compared to 2010, mainly by increasing production at Windalco-Ewarton
Plant Works in Jamaica.
Commenting on the full year production results, Oleg Deripaska, CEO of RUSAL said: "2010 witnessed the recovery of global aluminium consumption to levels above even the most optimistic forecasts of experts. As a result of our operational flexibility, diversified asset and sustainable low cost production, we were able to meet the rising demand by increasing production volumes at our most economically and environmentally efficient facilities. Looking ahead we are well positioned to take advantage of the positive long term fundamentals for the aluminium industry. We will continue to develop a new, more technologically advanced base for increasing our production output by resuming construction of the Boguchansk aluminium smelter and pursuing the programme of modernisation of existing facilities. Our goal is to fully satisfy needs of end users, including through our active participation in joint creation of new products. In order to achieve that, RUSAL is focusing on products with high added value through improving and developing foundry manufacturing within the aluminium division. This will enable the Company to increase production of alloys and meet the high demand from consumers representing the global automotive and construction industries."
Key operating data 3 months ended Year ended Change
31 Dec 31 Dec YoY
（'000 tonnes） 2010 2009 2010 2009 （%）
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Aluminium 1,050 989 4,083 3,946 3%
Alumina 2,082 1,884 7,840 7,279 8%
Bauxite （mil tonnes wet） 3.1 2.6 11.8 11.3 4%
Nepheline （mil tonnes wet） 1.2 1.1 4.9 4.4 9%
Aluminium foil and
packaging products 21.2 20.5 81.4 69.8 17%
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I. Market review
Aluminium industry in 2010
Worldwide production of primary aluminium in 2010 is estimated at 40.4 million tonnes, 9% higher than the 37.0 million tonnes of production in 2009. Aluminium consumption in 2010 is estimated at 40.6 million tonnes, 14% higher compared to 2009 with 35.6 million tonnes of consumption.
Aluminium production growth was largely driven by China, where output grew to 16.1 million tonnes in 2010 or by 24% compared to 2009. This was achieved despite production cuts in the second half of 2010, to minimize national energy consumption. Significant new additions to global output were realized in the Middle East.
Demand for aluminium continued to recover throughout 2010 driven by strong economic activity in Germany, South America and Asia. Demand in the USA and Japan stabilized in the third quarter following a run up in consumption driven by the automotive and engineered products sectors. Underlying demand for consumer products, including packaging and beverage cans, continued to support the rolled products segment. Chinese aluminium consumption continued to show strong growth in 2010 to a level of 16.5 million tonnes or 20% higher than in 2009.
Further evidence of physical demand improvement could be found in the regional premiums where the market has been supported by tight metal availability in Europe and North America and minimal seasonal reductions in output. London Metal Exchange （"LME"） warehouse stocks were drawn down by 345 thousand tonnes in 2010. As a consequence, premiums continued to be at well above historical averages. The Metal Bulletin Duty Paid, In Warehouse Rotterdam Premium was quoted at USD192.5 per tonne in the fourth quarter of 2010 and the US Platts Midwest Premium traded at USD141 per tonne for the same period.
Alumina market
The Company saw strong growth in alumina prices in 2010 to USD367 per tonne as more third party alumina sales were tracking spot market prices as global producers tried to de-link the alumina price from aluminium.
II. RUSAL's outlook for the global aluminium industry in 2011
Global aluminium consumption
Based on continuing robust demand for aluminium from China and the recovery of physical demand in the USA, Europe and Japan, global demand for aluminium is expected to rise by around 8% from 2010 levels to 43.8 million tonnes in 2011. Importantly, growth in aluminium demand in regions other than China is expected to be strong, indicating that Western markets appear to have rebounded positively from the financial crisis.
China has continued to experience significant year-on-year growth in floor space under construction and there is a strong outlook based on continuing trends in urbanization. As a result, aluminium consumption in China in 2011 is forecast to grow by 12% and reach 18.5 million tonnes. Looking further forward, RUSAL forecasts that China will continue to increase its imports of primary aluminium in the medium term.
In other major markets, RUSAL expects a strong rebound in North American aluminium consumption in 2011 and a growth by 4.5% to 5.4 million tonnes. The Japanese aluminium market is also predicted to show a continuation of growth in 2011 by 4% to 1.98 million tonnes. Western European growth in aluminium consumption in 2011 is expected to grow by 2% to 6.2 million tonnes in 2011, largely supported by increased economic activity in Germany.
RUSAL expects Russian and CIS aluminium market sales to grow by about 22% to 0.9 million tonnes in 2011, mainly driven by a strong rebound in the machinery, construction and packaging industries.
Aluminum price and premiums
Looking forward to 2011, RUSAL expects aluminium prices to sustain a level of above US$2,500 per tonne supported by a positive underlying demand, while the continuing weakness in the US Dollar supports the investment in physical assets by investors.
RUSAL expects premiums to be in the range of US$180-195 per tonne in the European Union, US$110-120 per tonne in Japan and US$130-150 per tonne in the USA.
Aluminium stocks
Total aluminium stocks are forecast to be stable in 2011 as financing conditions are still allowing investments in aluminium. RUSAL believes that current LME stocks are largely covered by financing transactions and will continue through 2011. In addition, RUSAL foresees a number of physically-backed aluminium Exchange Traded Funds being established in 2011 that are expected to be supportive of prices, providing an alternative delivery mechanism for primary aluminium.
Alumina market
RUSAL expects strong growth in alumina prices in 2011 as more third party alumina sales are tracking spot market prices as global producers try to de-link the alumina price from aluminium.
The alumina spot market price may reach a level of US$450 per tonne in 2011 based on strong Chinese and other regions' demands.
In August 2010, RUSAL commenced selling its free alumina at prices formed by a basket of indices including Metal Bulletin, CRU and Platts.
RUSAL believes that alumina contract prices and the LME aluminium price should be de-linked as they do not fully reflect growing production costs and capital expenditure. De-linking the alumina price from the aluminium price should promote fair pricing for this raw material and create new investment opportunities.
III. Production results
Aluminium production results
RUSAL's total attributable aluminium output amounted to 4,083 thousand tonnes in 2010, as compared to 3,946 thousand tonnes in 2009 （an increase of 3%）. Output in the fourth quarter of 2010 increased by 1% to 1,050 thousand tonnes, as compared to 1,038 thousand tonnes in the third quarter of 2010, and by 6% as compared to 989 thousand tonnes in the fourth quarter of 2009, showing an overall upward trend in production during those periods. These production results are in line with the forecasts made in the 2009 Annual Report. The table below shows the contribution from each facility.
The increases in volumes during each of the periods discussed above were mostly due to the restart of many of the Group's operations which had been previously idled in 2009. Production increased at Krasnoyarsk and Novokuznetsk smelters in Russia and KUBAL in Sweden. In addition, by the end of June 2010, potline 5 at the Irkutsk aluminium smelter （which was commissioned in April 2010） reached full capacity and throughout the third and fourth quarters has operated at full capacity.
Asset 3 mo. ended Year ended Change
31 Dec 31 Dec YoY
（Kt） Int 2010 2009 2010 2009 （%）
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- Russia （Siberia）
Bratsk aluminium smelter 100% 248 250 978 986 （1%）
Krasnoyarsk aluminium smelter 100% 251 242 979 952 3%
Sayanogorsk aluminium smelter 100% 136 135 537 530 1%
Novokuznetsk aluminium smelter 100% 71 51 270 230 17%
Irkutsk aluminium smelter 100% 102 91 394 349 13%
Alukom-Taishet aluminium smelter100% - - - 2 -
Khakas aluminium smelter 100% 74 75 296 297 -
- Russia - Other
Bogoslovsk aluminium smelter 100% 28 27 113 117 （3%）
Volgograd aluminium smelter 100% 41 37 155 145 7%
Urals aluminium smelter 100% 19 18 72 82 （12%）
Nadvoitsy aluminium smelter 100% 19 16 71 57 25%
Kandalaksha aluminium smelter 100% 16 15 64 56 16%
Volkhov aluminium smelter 100% 4 4 18 12 51%
- Ukraine
Zaporozhye aluminium smelter 97.6% 6 7 25 50 （50%）
- Sweden
Kubikenborg Aluminium （KUBAL） 100% 29 19 93 70 34%
- Nigeria
ALSCON 85.0% 5 3 18 11 66%
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Total production 1,050 989 4,083 3,946 3%
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Alumina production results
RUSAL's total attributable alumina output amounted to 7,840 thousand tonnes in 2010, as compared to 7,279 thousand tonnes in 2009 （an increase of 8%）.
Output in the fourth quarter of 2010 increased by 2% to 2,082 thousand tonnes, as compared to 2,046 thousand tonnes in the third quarter of 2010, and by 11% as compared to 1,884 thousand tonnes in the fourth quarter of 2009, showing an overall upward trend in production during these periods.
The increase in alumina production in 2010 was below the level forecasted by the Company in the 2009 Annual Report primarily due to a delay in restoration of operations at Windalco-Ewarton Plant Works in Jamaica caused by heavy tropical rains and a hurricane, which impacted the stability of equipment performance. Achinsk and Bogoslovsk alumina refineries in Russia have not also fully achieved planned production growth levels. Nevertheless, alumina production volumes in 2010 fully satisfied the Company's needs to feed aluminium production and allowed it to maintain self-sufficiency in alumina. The table below shows the contribution from each facility.
The increase in the volume of alumina production in 2010 as compared to 2009 was due to the substantial restoration of operations at Aughinish Alumina refinery in Ireland. The increase of alumina production in the fourth quarter of 2010 is explained by the June 2010 restart of Windalco-Ewarton Plant Works in Jamaica.
Asset 3 mo. ended Year ended Change
31 Dec 31 Dec YoY
（Kt） Int 2010 2009 2010 2009 （%）
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- Ireland
Aughinish Alumina 100% 476 446 1,850 1,245 49%
- Jamaica
Alpart 65.0% - - - 148 -
Windalco （Ewarton and
Kirkvine Works） 93.0% 128 - 238 153 56%
- Ukraine
Nikolaev Alumina Refinery 100% 404 383 1,534 1,495 3%
Zaporozhye Alumina Refinery 97.6% - - - 29 -
- Italy
Eurallumina 100% - - - 92 -
- Russia
Bogoslovsk Alumina Refinery 100% 263 244 990 1,024 （3%）
Achinsk Alumina Refinery 100% 250 231 1,000 922 8%
Urals Alumina Refinery 100% 188 184 730 717 2%
Boxitogorsk Alumina Refinery 100% 35 38 137 131 5%
- Guinea
Friguia Alumina Refinery 100% 153 156 597 530 13%
- Australia （JV）
Queensland Alumina Ltd. 20.0% 186 202 765 792 （3%）
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Total production 2,082 1,884 7,840 7,279 8%
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Bauxite production results
RUSAL's total attributable bauxite output was 11.8 million tonnes in 2010, as compared to 11.3 million tonnes in 2009 （an increase of 4%）.
Output in the fourth quarter of 2010 decreased to 3.1 million tonnes or by 6% as compared to the third quarter of 2010, but increased by 21% as compared to the fourth quarter of 2009, showing an overall upward trend in production in 2010. The table below shows the contribution from each facility.
Bauxite mines 3 mo. ended Year ended Change
31 Dec 31 Dec YoY
（Mt wet） Int 2010 2009 2010 2009 （%）
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- Jamaica
Alpart 65.0%- - - 0.3 -
Windalco （Ewarton & Kirkvine） 93.0% 0.4 - 0.9 0.1 524%
- Russia
North Urals 100.0% 0.8 0.8 3.1 3.4 （8%）
Timan 80.0% 0.3 0.4 1.9 1.9 -
- Guinea
Friguia 100.0% 0.6 0.5 2.1 1.7 24%
Kindia 100.0% 0.8 0.6 2.9 2.7 9%
- Guyana
Bauxite Co. of Guyana Inc. 90.0% 0.2 0.3 0.8 1.2 （33%）
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Total production 3.1 2.6 11.8 11.3 4%
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Nepheline production results
RUSAL's nepheline syenite production was 4.9 million tonnes in 2010, as compared to 4.4 million tonnes in 2009 （an increase of 9%）.
Output in the fourth quarter of 2010 increased to 1.2 million tonnes or by 6% as compared to the fourth quarter of 2009, driven by an increase in alumina production at the Achinsk alumina refinery.
Nepheline mines （Achinsk） 3 mo. ended Year ended Change
31 Dec 31 Dec YoY
（Mt wet） Int 2010 2009 2010 2009 （%）
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Kiya Shaltyr Nepheline Syenite 100% 1.2 1.1 4.9 4.4 9%
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Total production 1.2 1.1 4.9 4.4 9%
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Foil and packaging production results
The aggregate aluminium foil and packaging material production from the Group's plants was 81.4 thousand tonnes in 2010, as compared to 69.8 thousand tonnes in 2009.
Output in the fourth quarter of 2010 of 21.2 thousand tonnes has increased by 3% as compared to the third quarter of 2010 and by 3% as compared to 20.5 thousand tonnes in the fourth quarter of 2009, showing an overall upward trend in production during those periods. The table below shows the contribution from each facility.
The increase in volumes in each of the periods was mostly due to an increase in preliminary production orders in 2010 due to demand restoration.
Foil mills 3 mo. ended Year ended Change
31 Dec 31 Dec YoY
（Kt） Int 2010 2009 2010 2009 （%）
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- Russia
Sayanal 100% 9.6 9.8 38.0 33.2 14%
Ural Foil 100% 4.4 4.0 16.6 13.1 27%
Sayana Foil 100% 0.6 0.6 2.2 2.0 8%
- Armenia
Armenal 100% 6.6 6.0 24.6 21.5 15%
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Total production 21.2 20.5 81.4 69.8 17%
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Forward-looking statements:
This press-release contains statements about future events, projections, forecasts and expectations that are forward-looking statements. Any statement in this press-release that is not a statement of historical fact is a forward-looking statement that involves known and unknown risks, uncertainties and other factors which may cause UC RUSAL's actual results, performance or achievements to be materially different from any future results, performance or achievements expressed or implied by such forward-looking statements. These risk and uncertainties include those discussed or identified in UC RUSAL's prospectus dated 31 December 2009. UC RUSAL makes no representation on the accuracy and completeness of any of the forward-looking statements, and, except as may be required by applicable law, assumes no obligations to supplement, amend, update or revise any such statements or any opinion expressed to reflect actual results, changes in assumptions or in UC RUSAL's expectations, or changes in factors affecting these statements. Accordingly, any reliance you place on such forward-looking statements will be at your sole risk.
About UC RUSAL
RUSAL is the world's largest producer of aluminium, in 2009 accounting for approximately 10% and 10% of global production of aluminium and alumina, respectively. RUSAL employs more than 76,000 people in 19 countries, across 5 continents. RUSAL markets and sells its products primarily in the European, Japanese, Korean, South East Asian and North American markets. RUSAL's ordinary shares are listed on the Hong Kong Stock Exchange （Stock code: 486） and global depositary shares representing RUSAL's ordinary shares are listed on the professional compartment of Euronext Paris （RUSAL for Reg S GDSs and RUAL for Rule 144A GDSs）. For more information visit www.rusal.com.
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