Will Russia cut aluminum production after winter thaw?

April 9, 2009

On Alcoa’s quarterly conference call this week, CEO Klaus Kleinfeld pointed out that there is currently a 1.4 million tonne aluminum surplus in the world outside of China, and therefore to expect more production to come off line in coming months above the already-announced 1.6 million tonnes of production that has yet to be implemented.


Source: Alcoa

Both Alcoa, as the world’s largest aluminum producer, and China, producing more than 13 million tonnes in 2008, have idled substantial percentages of their output.

Russia, however, with about 4.2 million annual tonnes of capacity, has not curtailed any production, said Kleinfeld.

He said he thought political factors centered around maintaining employment levels have kept Russian smelters running.

“Many of the smelters are in regions where there is nothing else, in very remote areas, and are an anchor for the area. When Springtime comes and there are new opportunities to shift (workers) into, farming or construction, it will probably beĀ  easier to cut production there,” he said.

As for Alcoa’s own operations there, he said Russia had been affected by the economic slump more than they or Alcoa had thought last November.

“But what we’re seeing now, is that Russia is starting to stabilize and seems to be starting to come out of it,” he said.

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