Russian metals giant Rusal revealed Monday that it will minimize aluminum production by at least 6% due to surging basic material costs and decreasing domestic demand.The first stage of the cuts will slash output by 250,000 metric tons, the company said, without specifying the number of additional decreases may follow or over what timeline.Rusal, established by businessman Oleg Deripaska, said its revenue margins are being squeezed by record-high alumina costs of $700 per lot.
While production expenses climb, aluminum rates stay low due to weak worldwide financial conditions and an oversupplied market, it added.The business sources over a 3rd of its alumina from abroad at market prices.
Rusal has enhanced imports from China, India and Kazakhstan after Australia prohibited exports of alumina and aluminum ores to Russia, and its Ukrainian plant suspended operations.At home, demand is falling as the Russian economy slows and monetary policy tightens, leading to minimized output from significant aluminum consumers, including the construction and vehicle industries.Despite the cuts, Rusal promised to maintain its full labor force and social benefits.Rusal operates 10 aluminum plants in Russia and one in Sweden.
While not directly targeted by Western sanctions, the United States and U.K.
have barred new Russian aluminum from entering their markets or being traded on their metal exchanges.Rusal has stated it remains committed to supplying aluminum to other international markets.The business reported a 2.3% production increase to 1.96 million tons of aluminum in the very first half of 2024.
In 2023, Rusals amount to aluminum output was 3.85 million tons.