Rusal Sees Global Aluminum Market Surplus Narrowing by 2025 Amid Stronger Demand
Rusal, the world's largest aluminum producer outside of China, anticipates that the global aluminum market could edge closer to balance by 2025. The company expects demand to rise, aided by lower borrowing costs and China’s economic stimulus measures, helping to reduce the current supply surplus.
Russia’s Rusal, which accounts for 5.5% of global aluminum production, is redirecting shipments to China in response to reduced sales in Western markets affected by sanctions. Sanctions from the U.S. and U.K. have led to the London Metal Exchange (LME) banning Russian aluminum, copper, and nickel from being stored in its listed warehouses since April.
Despite expectations that aluminum demand growth in China may slow in 2025, the Chinese market remains structurally short on supply, while a surplus is building outside China. Rusal projects a surplus of approximately 500,000 tons in the global aluminum market for 2024, which is expected to shrink to 200,000-300,000 tons in 2025.
Global primary aluminum production for the first eight months of 2024 reached 48.2 million tons, up 3.2% year-on-year, according to the International Aluminium Institute. This production growth is being matched by demand, with Rusal predicting demand to grow by 2.5%-2.7% in 2024 and 3.5% in 2025.
China has now become Rusal’s largest export market, filling the gap left by decreased Western sales. Despite the challenges posed by sanctions, Rusal maintains that its low-carbon aluminum continues to be widely accepted by a diverse global customer base.
The company’s first-half revenue for 2024 fell by 4%, totaling $5.7 billion, while sales volumes dropped 3% to 1.9 million tons due to lower LME price premiums. Rusal did not provide specific details regarding ongoing negotiations for 2025 sales, but confirmed that talks are in line with the normal annual cycle during LME Week, a major industry event in London.
