Rusal: Must cut aluminum output by 3%

--Rusal official says more aluminum-production cuts are needed to cut record-high inventories

--Rusal estimates 1.5 million metric tons of supply should be cut

--A 3% reduction in global output could bring LME stocks to pre-2008 levels in two or three years, according to Rusal official

NEW YORK--About 1.5 million metric tons of aluminum production must be removed from the global market to reduce record-high inventories, said an executive at United Co. Rusal PLC , the world's largest producer of the lightweight metal.

About 5.2 million metric tons of aluminum is currently sitting in London Metal Exchange warehouses, a situation that continues to worry Rusal, Oleg Mukhamedshin, the company's director for strategy and business development, told Dow Jones on the sidelines of the VTB Capital Investment Forum in New York.

"The industry needs further production cuts because we need to digest this stock," Mr. Mukhamedshin said.

Global aluminum output is forecast at 50 million metric tons this year, he said, so about 3% of supply must be shuttered. This would help reduce LME stocks to pre-2008 levels in two or three years, as demand for aluminum outside of China is expected to grow between 3% and 4% a year, Mr. Mukhamedshin said.

Aluminum producers have made an effort to rein in production as demand for the metal has declined. Rusal has said it will cut 300,000 tons of output in 2013. Alcoa Inc. (AA), the U.S.-based aluminum company, slashed its annual production capacity by 531,000 metric tons, or 12%, in 2012.

Most of Rusal's output cuts will affect the company's European operations, but "we will also reduce some production in Siberia," Mr. Mukhamedshin said. More details will be available in the coming months, once the Rusal board approves the program, he said.