SHANGHAI United Co. Rusal says it plans to cut 300,000 tonnes of aluminum capacity in 2013 after it swung to a loss in 2012.
The production cuts are a consequence of global overcapacity, rising power tariffs and lower metal prices, and would be targeted at the Moscow-based companys least efficient smelters, the company said March 4.
The aluminum producer recorded a loss of $55 million in the year ended Dec. 31, down from a profit of $237 million in 2011, blaming low prices in particularly challenging markets.
The situation in the aluminum market in the last 12 months requires producers to rationally approach the utilization of existing capacities and the commissioning of new ones, Rusal chief executive officer Oleg Deripaska said in a statement.
Despite global aluminum consumption rising by 6 percent in 2012 to 47.4 million tonnes, negative investor sentiment led to (London Metal Exchange) prices for aluminum decreasing by 15.7 percent year on year, taking a large share of the global production capacity to or below break-even level, Deripaska said.
In a separate statement on the planned capacity cuts, he said the aluminum industrys oversupply crisis ... was never completely addressed.
Rusals full-year revenues dropped 11.4 percent year on year to $10.89 billion.
A version of this article was first published on AMM sister publication Metal Bulletin.