RUSAL has decided to optimize its aluminum production capacity against the background of record alumina prices and high risks of maintaining a negative macroeconomic environment. The first stage of the capacity optimization program provides for a reduction in aluminum production by 250 thousand tons, the company said in a statement.
At the moment, RUSAL is forced to purchase more than a third of the required alumina on world markets at exchange prices, which puts serious pressure on the marginality of production. Since the beginning of 2024, alumina prices have almost doubled to more than $700 per ton. As a result, the cost of alumina is over 50% of the cost of aluminum against the usual level of 30-35%.
At the same time, the increase in alumina prices is not compensated by a proportional increase in the price of aluminum against the background of maintaining a weak macroeconomic environment and a surplus of metal supply on the market. The slowdown in economic growth and tightening monetary policy lead to a decrease in output in the leading consumer industries of aluminum, including construction and automobile production, which leads to a decrease in demand for key metals.
The launch of the production optimization program will not have an impact on the company's social initiatives. RUSAL will maintain the number of labor collectives at all production sites, as well as social programs in full.
RUSAL is a Russian aluminum company. RUSAL is present in 20 countries on 5 continents. The net profit of RUSAL IFRS for the first half of 2024 increased by 34.5% to $565 million. Adjusted net income increased by 41.6% to $446 million. Adjusted EBITDA increased by 171% to $786 million. Revenue decreased by 4.2% to $5.695 billion. The company's capital expenditures increased by 23.7% to $516 million.
