United Co. Rusal, the world’s largest aluminum producer, may reduce output by as much as 8.4 percent this year to allow prices to recover.
The company will idle 350,000 metric tons of capacity at five of its plants with high production costs until aluminum rises to $2,400 a ton, Oleg Deripaska, Rusal’s billionaire chief executive officer, said in an interview with Interfax newswire. Rusal’s press service confirmed the comments when contacted by Bloomberg News.
Aluminum prices fell more than 13 percent this year to $1,799 a ton as global stockpiles reached records and last month traded at the lowest level since 2009. Rusal said in March that it would lower production by 300,000 metric tons in 2013 from the 4.2 million tons last year.
About 40 percent of producers globally, excluding China, are loss-making at the current price, while each further $50-a-ton drop on the London Metal Exchange will make another 1.5 million tons of capacity unprofitable, Deripaska said.
Rusal’s depositary receipts fell 1.6 percent to 112.5 rubles at 3:19 p.m. in Moscow today.
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