Vimetco Plans to Produce 26% More Aluminum Products in Romania

May 7 (Bloomberg) -- Vimetco NV, the aluminum company controlled by Russia’s Vitaliy Machitski, plans to expand its output of processed products in Romania by 26 percent this year while keeping production of primary metal flat.

Production of goods such as sheet, coils and plates at its Alro plant will reach 40,000 metric tons, compared with 31,700 tons last year, Chief Financial Officer Marian Nastase said by phone from Bucharest yesterday. Output of primary aluminum, mostly derived from alumina, will stay at about 186,000 tons, he said. Production was 288,000 tons in 2008.

“The margin is significantly higher” for products than for primary aluminum, Nastase said.

Aluminum companies slashed production last year in response to the global recession, driving prices 45 percent higher, the most since 1994. That’s now spurring plants to reopen and expand, with Barclays forecasting a jump of almost 11 percent in global supply this year. Western European output will be little changed as producers contend with higher power prices.

“We cut production last year because of the high cost of energy,” Nastase said. The situation with energy costs is still too “unpredictable” to increase primary output, he said.

Vimetco, based in Amsterdam, restarted its bauxite mine in Sierra Leone and reopened its refinery in Romania in the fourth quarter, Nastase said. The company’s Chinese units produced about 412,000 tons of primary aluminum in 2009 and 58,000 tons of aluminum products.

Aluminum for delivery in three months, the benchmark contract on the London Metal Exchange, traded at $2,094.75 a ton as of 9:39 a.m. in London. The metal should trade at $2,000 to $2,500 this year, the chief financial officer said.