Rusal: Practically No Unsold Metal In Ongoing Production

LONDON, Mar 18, 2009 (Dow Jones Commodities News via Comtex) -- Russia's aluminum producer United Company Rusal has "practically no unsold metal in ongoing production" as it targets to increase sales to the end-users, the company's director of sales told Dow Jones Newswires Wednesday. As of the beginning of March, Rusal has signed or started talks on long-term sales of 80% of aluminum and alloys production, Belsky said. "Our strategic aim is to further increase sales to the end-users, which represented 56% in the fourth quarter of 2008, and we expect to keep it at 60% in 2009, while the rest will be sold via regional traders." He added that the company "is trying to insure end-users' payments and avoid sales to buyers with problems." Russia's "domestic market remains strategically and politically important, but we are now diversifying our exports due to the changing market environment market," Belsky said. Russia's domestic demand has been the main source of growth for the country's metal companies, but a severe drop in construction, car making and other industries forced them to seek larger exposure to the export markets. Belsky said the European Union, Asia and the U.S. were Rusal's main export markets. In Asia, the company is targeting Japan, South Korea, Taiwan, Thailand and Vietnam. Rusal also sees China as a strategic market in the long term. Rusal's manager says he believes that the aluminum market has touched the bottom, but global demand for aluminum will remain low till the end of 2009, with some aluminum surplus in 2010. He said that although "it's not possible to talk about the resurgence of the market", he believes that "the market has touched the bottom, because there were no sharp price drops at the nonferrous metals market over the past two months." The price of aluminum has more than halved since its peak last July at $3,380 per metric ton. Belsky said that he expects to see the closure of all non-profitable aluminum producers in the world in 2009. "The current crisis is a purgatory for the market", he said, adding that Russia, Middle East and China will emerge as main aluminum producers after the crisis, while the rest will lose their significance. Belsky is up beat on Rusal's future though. "Rusal is well positioned as our production costs are minimal compared with many other producers." Rusal has said it will its aluminum production by 11% by April 1 and that is now in talks with its creditors on restructuring $14 billion of debt. -By Alexander Kolyandr, Dow Jones Newswires; +44 20 7842 9410; Alexander.Kolyandr@dowjones.com (END) Dow Jones Newswires