Rusal Aluminum Output Falls in First Quarter

United Co. Rusal PLC (0486.HK), the world's largest aluminum producer, said Tuesday that it saw a substantial narrowing in first-quarter losses, as it pushes to cut annual output in a market battling with excess global supply, poor demand and low prices.

First-quarter net losses adjusted for the company's Norilsk Nickel investment and derivative and interest rate charges totaled $47 million, almost halving the $90 million loss made for the same period in 2012 and about a third of the $138 million-loss in the fourth quarter.

Rusal also reported a 4.0% drop in first-quarter aluminum production, after it said in March it would cut production 7% in 2013 and maintain lower production through at least 2015 unless prices rise sharply. Output was 3.0% lower compared with the fourth quarter of last year.

"The rationalization of production and a desire to help reach the balance of supply and demand remain at the forefront of Rusal's business development plans," Rusal Chief Executive Oleg Deripaska said in a statement.

First-quarter net profit fell 66% to $19 million from $56 million in the year-earlier period, but was sharply higher than the fourth quarter's $411 million loss.

Rusal's management has urged other major producers to slash production to help clear a glut of warehoused aluminium that has piled up as demand has slipped in major consuming economies including the Europe, Japan and the U.S.

"Our long-term rebalancing strategy taking place in the Western part of our...least efficient [Russian] operations remains on track. We believe this approach needs to be adopted across the whole industry, to move it away from its present unsustainable position characterized by excessive warehouse stocks," Mr. Deripaska said in the statement.

Aluminum is used in a range of applications including in the automotive and construction industries, and demand has been hit hard by sluggish global growth.