Rusal Expects Global Aluminum Demand to Rise 2% This Year

Russia’s Rusal, the world’s second-largest aluminum producer, expects that global demand for aluminum will grow by 2% to 67.5 million tons this year, the company said in its report released at the Hong Kong Stock Exchange on Friday.

“We expect global demand for primary aluminum to grow by 2% year-on-year in 2019, to 67.5 million tons, and there will be a deficit of around 0.7-0.8 million tons on the market,” Rusal said.

The company noted that in the first half of 2019, growth rates of global demand for aluminum were low due to economic problems and uncertainty. In the first six months of 2019, global aluminum production grew by 1% to 31.9 million tons.

“While we observed positive trends of small growth on the aluminum market in the first half of 2019, the situation worsened in the second half of 2019, and demand for aluminum fell,” Rusal stated.

“Uncertainty on the market over tensions in trade between China and the United States, together with global decrease in manufacturing activity, may negatively impact demand for aluminum in the second half of 2019,” the report reads.

The company said lifting the share of high value-added products (VAP) in its sales might prove to be tough in coming months due to the weaker market for the metal which caused a 38% slump in its first-half net profit.

Hong-Kong listed Rusal, the world’s largest aluminum producer outside China, has been restoring operations after U.S. sanctions – first imposed on Rusal and its co-owner Oleg Deripaska in April 2018 – were lifted in January this year.

Rusal’s recurring net profit fell to $599 million in the six months ended June 30, from $971 million a year earlier, as London aluminum prices were down by 17%, it said on Friday.

It posted an adjusted net loss of $98 million in the first six months of 2019.