Rusal Turns In Improved Numbers for Q1

Rusal Turns In Improved Numbers for Q1
Achinsk Alumina Refinery. Source: Rusal

Russia’s UC Rusal reported results for the first quarter of 2016 early Friday, turning in an increase in sales to 957,000 metric tons, which is up from 876,000 metric tons in the previous quarter, an increase of 9.2% quarter-on-quarter. The firm turned in stronger numbers this quarter, largely on account of a drop in production from the People’s Republic of China and a corresponding rise in the price of aluminium.

Although sales were up for the quarter, production was down slightly to 916,000 metric tons, a drop of 0.5% quarter-on-quarter. The firm’s smelters ran at an average of 95% of capacity in Q1, and smelters in Siberia accounted for approximately 94% of Rusal’s overall production.

Rusal’s share of value-added principal in overall aluminium sales dropped slightly to 41%, which is down from 45% in the previous quarter, thanks to greater aluminium sales. The volume of VAP was essentially unchanged from Q4 2015.

The firm’s realized aluminium price for Q1 was off by 3.6% from the previous quarter at US$1,666 per metric ton, due largely to a drop in average aluminium London Metal Exchange QP prices as well as the average premium. A delayed recognition of the market premium’s benchmarks in the realized aluminium premium coupled with a lower share of VAP in the firm’s product portfolio was behind the drop.

Rusal’s aluminia production in Q1 was 1,873 thousand metric tons, which is down by 1.7% from the previous quarter. Production at overseas refineries was 1,196 thousand metric tons, down by 4.3% from the last quarter. This drop was largely caused by scheduled repairs at those refineries. Rusal’s Russian operations’ output was 677 thousand metric tons, which is up by 12.4%. Improved performance by Achinsk Alumina Refinery led the way in Q1.

The firm’s bauxite output was up to 3,009 thousand metric tons, an increase of 5.6% over last quarter, largely due to an improved performance by the firm’s Timan and Guyana mines. Nepheline ore production at Rusal’s Kiya Shaltyr mine was up significantly to 1,111 thousand metric tons, an increase of 16.7% over the previous quarter. This is due largely in an effort to satisfy demand from the firm’s Achinsk Alumina Refinery.