Actual: Aluminum
26 March 2020

In 2019, global primary aluminum production increased by 1.9% compared to the previous year. At the same time, the rate of growth in metal production in China decreased significantly - 2.5% compared with 5.8%. As in previous years, the metal deficit will remain on the market at around 2 million tons.

In 2019, global primary aluminum production increased by 1.9% compared to the previous year. At the same time, the rate of growth in metal production in China decreased significantly - 2.5% compared with 5.8%. As in previous years, the metal deficit will remain on the market at around 2 million tons.

The automotive industry will continue to be the main consumer of aluminum due to the active trend to reduce vehicle weight. According to estimates, the share of aluminum by 2025 in the mass of an average car may increase by 60-70%. In the same direction, there is a tendency for the development of electric vehicles. In addition, stable high growth rates of demand for metal in construction will continue. As for world prices, the main driver remains China, which accounts for more than 58% of world production.

In the first half of 2019, uncertainly remained on the market, associated with US sanctions against the largest world producer RUSAL. The decisions of the United States Office of Foreign Assets Control, which oversees sanctions, radically changed the company’s management system, and now the leadership is dominated by representatives of American and British business, who interact with VTB, representing Russia.

World Production and Consumption of Primary Aluminum, th.tonnes

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Source: International Aluminium Institute (IAI); Aluminum Association

A number of sectors of the American economy depend on RUSAL products. In recent years, RUSAL supplied the American market from 800 thousand tons to 1 million tons, that is, about a quarter of its own production. This represents about 14% of US aluminum imports. Therefore, the impact of the sanctions was relatively short-lived, and RUSAL practically restored metal production.

At the same time, in the first half of the year, a slight drop in demand was observed in the domestic market due to a decrease in industrial production growth rates. Nevertheless, the company management believes that the most difficult moments are already behind them. The company continued the construction of the Boguchansk and Taishet plants. In addition, it succeeded in reanimating bauxite mining capacities in Guyana and in Guinea, suspended a year earlier.

RUSAL's investment policy in 2020 will be quite active and will mainly be aimed at completing large projects that have been launched, especially in developing the raw material base and deeply modernizing existing facilities in order to solve environmental problems and improve working conditions. The uncertainty of the world market in 2020 is associated with the uncertainty of the prospects for the development of the global economy. Hence, such a wide range in foreign forecasts for aluminum production - from 1.2% to 5%.

 

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