MOSCOW, Sept 13 (Reuters) - The main owner of Russia’s RUSAL , the world’s largest aluminium producer, said an overhang of aluminium should be reduced through production cuts and said stocks should be slashed to get rid of loss-making supplies.
Oleg Deripaska, also the aluminium giant’s CEO, said he expected global aluminium supply cuts during the next 6-9 months.
“During the next 6 to 9 months we will see rationalisation of production programmes volumes of production should be decreased to achieve the balance of supply and demand,” Deripaska told a briefing.
He did not say how much supply could be cut, adding that the market would decide itself.
He also said stocks should fall. While the global aluminium industry is in chronic oversupply, millions of tonnes of the metal are held in warehouses, and much of these stocks are used for financing purposes.
Stocks in LME warehouses were reported at just under 5 million tonnes on Thursday.
“All interim stocks are loss-making. We should get rid of these losses,” Deripaska added. “Right now the volume of metal in warehouses is twice the reasonable level.”
Deripaska’s top lieutenant at RUSAL said demand would support price gains to $2,300 per tonne in the first half of 2013.
“We expect demand recovery. We are especially hopeful for the construction sector,” Vladislav Soloviev, first deputy CEO of RUSAL, told the same briefing, held at a Metal Bulletin aluminium conference in Moscow on Thursday. (Reporting by Polina Devitt; Writing by Lidia Kelly; Editing by Melissa Akin)