Aluminum Loses Efficiency
World prices for aluminum shed by over 30 percent from early September, having sunk to below $2,000 per a ton past week. With such prices, operation of better part of the plants in the world isn’t efficient, the analysts calculated. The biggest transnational producers declared intention to revise production programs. Higher efficiency keeps RUSAL afloat, but the analysts apprehend the decline in production should the prices fail to adjust.
Global prices for aluminum have shed by over 30 percent vs September prices. Not once, the prices sank below the psychological ceiling of $2,000 per a ton, when production at better part of the plants of Western Europe, the United States and China gets unprofitable.
The prices lowered to $1,950 per a ton past week and the three-month futures were traded at $2,010 per a ton. Aluminum recovered to between $2,011 per a ton and $2,402 per a ton on LME Friday but the price of Shanghai Metal Exchange was no more than $1,983.
According to Asmik Sardaryan from RUSAL, the company doesn’t intend to revise production targets for its Russia’s facilities and won’t change “the price policy,” as over 80 percent of its product is exported to end users under the long-term contracts.
So far, RUSAL has frozen only the electrolysis and alumina production at Zaporozhie Aluminum Works and reduced by 10 percent the production at Montenegro’s Kombinat Aluminijuma Podgorica.
RUSAL monthly loses roughly $36 million in revenues on decline in the global aluminum prices, calculated Yuri Volov from the Bank of Moscow. According to Dmitry Baranov from Finam Management, the price for aluminum is steadily nearing the cut-off price (when the production loses efficiency). For RUSAL, that price is between $1,750 per a ton and $1,800 per a ton thanks to the higher efficiency of Russia’s facilities. “November will be probably the fluctuating month, but the price may begin to grow in December again,” Baranov forecasted.
www.kommersant.com
All the Article in Russian as of Nov. 10, 2008
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