RUSAL eyes long-term aluminium deals in China

UC RUSAL, the world’s largest aluminium producer, plans to secure between five and eight major Chinese buyers on long-term contracts to carve a larger share of the world’s gest market for the metal. UC RUSAL, fresh from Russia’s gest-ever private sector debt restructuring, also plans to restart 100,000 tons of idle capacity by the end of the first quarter as global consumption enters the second phase of recovery, a senior official said.
“Large Chinese companies represent a very interesting customer segment, and that is where we would like to focus our efforts.”

UC RUSAL, whose largest shareholder is Russian billionaire Oleg Deripaska, is seeking a ger share of a Chinese market where per capita aluminium consumption has doubled to 10 kg a year in the last five years, versus 20-25 kg in western Europe. The company struck a deal in November to sell 1.68 million tons of aluminum to Chinese state conglomerate NORINCO over seven years. “We are in discussions with several similar-sized corporations, which will hopefully be buying from us at the same levels. Our goal is to sign five to eight similar customers over the next three to five years,” the official said.

He said RUSAL had no plans to sell its 25 percent stake in Russia’s Norilsk Nickel, the world’s largest producer of nickel and palladium, as it preferred to keep its exposure to other metals. The entire global aluminum industry, worth $100 billion, was still less than the market capitalization of BHP Billiton, the world’s largest miner. “Unless you are in oil or, to a lesser extent, steel, you cannot build a balance sheet on one commodity ... If you want to compete on a global scale, that’s the type of company one needs to be thinking of building.”