Higher aluminium prices lift Rusal Q2 core earnings
Russian aluminium giant Rusal reported a 48% rise in second-quarter core earnings on Friday due to a higher aluminium price, and pointed to a positive outlook for the second half as supply in China tightens.
Earnings before interest, tax, depreciation and amortisation (EBITDA) rose to $510-million from $344-million in the same quarter a year ago, in line with a Reuters survey of analysts at six banks for $507-million.
"Looking ahead to the second half of the year, our outlook for the aluminium industry is positive. Consumption of aluminium is set to remain healthy until the end of the year, increasing by 5.9% for the whole 2017," Hong Kong-listed Rusal said in a statement.
"On the supply side, the spotlight is now on China following the recent announcements from Chinese regulators regarding capacity cuts, which may result in global market deficit widening to around one-million tonnes in 2017," it said.
The world's top aluminium producer has embarked on a plan to clear its skies by cutting capacity in heavy polluting coal-fired industries like steel and aluminium, as well as by eliminating overcapacity in those sectors.
"When considering the expected curtailments of the so-called 'illegal capacities', Rusal expects that the Chinese aluminium market balance will improve in 2H 2017 leading to a much tighter market situation in 2018," it said.
"Rusal expects another 2-million to 3-million tonnes of operating capacities will be closed by the end of this year."
Rusal last month reported a 4.6% rise in second-quarter sales to 1.0-million tonnes and a 22% jump in average aluminium prices to $2 087 per tonne.
London aluminium prices are up 25% this year due to stronger demand and expectations that top producer China will reduce output during the winter as Beijing intensifies its war on pollution.
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