Rusal Cuts Aluminium Production as Alumina Costs Surge to Record Levels

Rusal, one of the world’s largest aluminium producers, has announced a plan to optimize its aluminium production capacity in response to record alumina prices and the challenging macroeconomic environment. The initial stage of this capacity optimization program will involve reducing aluminium production by 250,000 tonnes.

Currently, Rusal relies on purchasing more than a third of its required alumina from global markets at fluctuating exchange prices, which has put significant pressure on its production margins. Since the beginning of 2024, alumina prices have almost doubled, reaching over $700 per tonne—an all-time high. This surge in alumina prices now represents over 50% of aluminium production costs, compared to the typical range of 30-35%.

Despite the dramatic rise in alumina prices, aluminium prices have not experienced a corresponding increase due to a weak macroeconomic environment and an oversupply in the metal market. Slower global economic growth and tighter monetary policies have led to reduced output in key aluminium-consuming industries, such as construction and automotive production, further lowering demand for aluminium.

Rusal emphasized that the launch of this production optimization program will not impact the company’s social initiatives. Rusal plans to maintain its workforce across all production sites and continue its social programs without any reductions.