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RUSAL Announces Second Quarter Operating Results

Metal News - Published on Tue, 28 Jul 2020

Image Source: RUSAL
Leading global aluminium producer RUSAL announced its operating results for the second quarter of 2020. Aluminium production in 2Q20 totaled 927 thousand tonnes (-1.4% quarter-on-quarter), with Siberian smelters representing 93% of total aluminium output. In 2Q20, aluminium sales amounted to 976 thousand tonnes (up 6.8% QoQ). During this period, sales of value added products (VAP) decreased by 14.0% QoQ, to 363 thousand tonnes, demonstrating a decline of VAP share in total sales mix to 37% (vs 46% in 1Q20) due to the COVID-19 pandemic. In 2Q20 on the back of diversified client base, the Company successfully adjusted the regional sales geography in line with the new environment on the markets caused by COVID-19. European destination still dominates the mix, however it decreased in share to 46% (-9pp QoQ), while Asia’s share grew to 27% (vs 15% in 1Q20). This shift reflects less severe lockdown measures in Asia and one-off arbitrage opportunity in China. In 2Q20, the average aluminium realized price decreased by 11.3% QoQ to USD1,654/t. The decrease was driven both by London Metal Exchange QP component (-10.7% QoQ to USD 1,526/t) and average realized premium component (-17.9% QoQ to 128/t). The decline in premiums during 2Q20 is attributed to the decrease of VAP share in product sales mix and overall market conditions related to the pandemic.

Alumina - In 2Q20, total alumina production was almost flat QoQ, at 2,009 thousand tonnes. The Company’s Russian operations accounted for 35% of total output.

Bauxite and nepheline ore - In 2Q20, bauxite production increased by 8.8% QoQ, to 3,892 thousand tonnes. The growth was driven by an increase in output at Timan due to low comparison base of 1Q20, affected by seasonal factor. Nepheline production increased by 9.0% QoQ, to 1,181 thousand tonnes.

Market overview - In 1H 2020, the global primary aluminium demand was down by 6.6% year-on-year to 30.3 million tonnes. Ex-China demand contracted by 15.4% to 12.3 million tonnes, while Chinese demand remained almost unchanged and shifted by a mere 0.5% to 18 million tonnes. Global aluminium production in 1H 2020 grew by 1.8% to 32.1 million tonnes, including the Rest of the World growth at 0.5% YoY to 13.9 million tonnes. In China, a 2.8% growth YoY to 18.2 million tonnes was seen for the same period. Overall, the global market was in surplus of 1.8 million tonnes during 1H 2020.

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Posted By : Yogender Pancholi on Tue, 28 Jul 2020
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