Rusal’s profit slumped 70 percent in the first half of the year, but the deputy CEO of the aluminum giant said tightening Chinese supply was helping stabilise metal prices.
“The price is very much stable at the moment and we can see… improved supply-demand balance,” Oleg Mukhamedshin told CNBC Friday.
On Thursday, the Russian company posted a decline in first half net profit to $261 million from $879 million in the first six months of 2015.
Aluminum’s cash ask price was $1,624 per ton on the London Metals Exchange on Thursday. The metal has stabilized at low levels this year after tumbling in 2015 and the latter part of 2014. It has shown fledgling strength in recent weeks, gaining 1.6 percent since the start of August.
China stands accused of flooding the market with cheap aluminum to the detriment of European competitors. China produced 2,659 thousand metric tons of aluminum in July, while all of east and central Europe, including Russia, produced only 335 thousand metric tons, according to the International Aluminum Institute.
Mukhamedshin said Rusal would benefit from the stabilization in the Russian economy and the ruble since April.
“There is growing demand for our products in Russia. We actually expect to double consumption in Russia in five years’ time,” he told CNBC.
The Russian economy is seen returning to growth in 2017 after shrinking by another 1.2 percent this year, according to the World Bank.