A top executive of the world's No1 aluminum producer, United Co Rusal (0486), warned yesterday that the price of the metal may fall further unless production is cut as current stocks could last for another three years.
The global inventory stands at five to six million tonnes, Rusal deputy chief executive Oleg Mukhamedshin said in Hong Kong.
His comments coincided with the aluminum price hitting a four-year low of US$1,875 (HK$14,587) a tonne.
Rusal has announced it will cut production by 300,000 tonnes this year.
"We hope the whole industry can reduce by 1.5 million tonnes at the same time," Mukhamedshin said. He believes that would have a positive impact on the price of aluminum amid rising consumption.
On the strength of continuing urbanization in the mainland, Mukhamedshin also expects aluminum use to increase by 10-11percent in the mainland this year and 4-5percent in the rest of the world.
He noted too that Rusal signed a memorandum of understanding with Chalco (2600), China's largest aluminum producer, during President Xi Jinping's recent visit to Moscow.
The companies will develop technologies together to produce aluminum with processes that ensure sustainable development.
"We will also look for M&A opportunities in China with Chalco," he said, though Rusal's focus this year "is not on expansion but rather on reducing production."
Rusal shares surged 3.2percent yesterday to HK$4.19 in a retreating market.
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