Rusal Closes Out 2017 With Strong Q4 Thanks to Value-Added Products and Third-Party Sales

Rusal Closes Out 2017 With Strong Q4 Thanks to Value-Added Products and Third-Party Sales
Aughinish Alumina. Source: UC Rusal

Russian Federation aluminium giant U.C. Rusal released results for the final quarter of 2017 yesterday, showing solid improvements across the majority of its operations in the period.

The fourth quarter saw Rusal churn out 944 thousand metric tons of primary aluminium, a 1.4-percent rise over the prior quarter’s total of 931 thousand metric tons. Rusal’s aluminium utilization rate reached 97 percent in the quarter, an improvement of 2 percent over Q3. Siberian smelters produced 94 percent of the company’s quarterly total, as Krasnoyarsk aluminium smelter led the way with a total of 258 thousand metric tons smelted in the quarter, followed closely by Bratsk’s total of 255 thousand metric tons.

Alumina production for the quarter came to 1,990 thousand metric tons, good for a 1.3-percent boost over the third quarter’s total of 1,965 thousand metric tons. Ireland’s Aughinish Alumina refinery led production with 490 thousand metric tons in the quarter, with Nikolaev close on their heels with production of 431 thousand metric tons. Overall, 96 percent of the firm’s alumina production in the quarter arose from refineries in Russia, which, along with operations in the Ukraine, saw the early completion of upgrades in the quarter.

Bauxite production totaled 2,945 thousand metric tons in Q4, up by 7.4 percent quarter-on-quarter from the third quarter’s total of 2,742 thousand metric tons. Guinea’s Kindia topped all others in bauxite production with 829 thousand metric tons in the quarter, followed by Timan mine with 714 thousand metric tons. The rise is due in part to a low comparison base from the prior quarter thanks to difficulties in bauxite mining in certain drought-stricken areas.

Aluminium sales in the quarter totaled 1 million metric tons, 3.3 percent above the third quarter, when the firm sold 968 thousand metric tons, largely thanks to a jump in third-party aluminium products sales, which rocketed up by 91.3 percent over last year’s fourth quarter to 169 thousand metric tons.

The firm’s realized price for aluminium in the quarter averaged US$2,263 per metric ton, up by 6.5 percent over the third quarter average of US$2,124 per metric ton. Rusal credits the rise to a favorable situation at the LME, specifically the QP5 component, which rose by 7.1 percent over the previous quarter to US$2,102 per metric ton.

Value-added products in the quarter totaled 469 thousand metric tons, good for a 9.1-percent rise year-on-year, and holding steady at the company’s intended 50/50 balance between value-added products and raw materials. However, sales of value-added products slid by 3.2 percent from last quarter to 462 thousand tons. Rusal chalks up the drop to a bias towards primary aluminium in current contracts, which it expects to balance out to the 50/50 target as the year progresses.