RUSAL's Massive H1 Profit Drop, Cut Outlook Pressures Alcoa (AA), Noranda (NOR), Others

August 27, 2012 10:21 AM EDT
Russian aluminum giant RUSAL is pressuring peers Monday, as the company reported a massive drop in profits for the first six-months of the year, while simultaneously cutting production expectations and dimming its growth outlook for the sector.

RUSAL's net profit sank 95.3 percent in the first-half of 2012, dropping from $779 million down to $37 million. Recurring profits down 72 percent over the same period.

The drop in profit comes as aluminum prices are near three-year lows, recently quoted at about $1,870 per ton on the London Metal Exchange.

Along with results, RUSAL said it would trim about 150,000 tons of production before the end of 2012. The cuts will come at RUSAL's Nadvoitsy aluminum smelter (NAZ), Volkhov aluminum smelter (VAZ),Bogoslovsk aluminum smelter (BAZ), and Novokuznetsk aluminum smelter (NkAZ) in Russia.

Looking ahead, RUSAL dimmed growth expectations in the aluminum market for 2012. From a prior forecast calling for a 7 percent increase in global aluminum demand and 11 percent rise in China, RUSAL now sees global demand rising 6 percent and China moving 10 percent higher. Consumption in China is expected to accelerate in the second-half, bolstered by expected government stimulus programs, the Company noted.

Lower today are Alcoa (NYSE: AA), Kaiser Aluminum (Nasdaq: KALU), Aluminum Corp. of China (NYSE: ACH), and Noranda Aluminum (NYSE: NOR).

Serious News for Serious Traders! Try Premium Free!

You May Also Be Interested In

Related Categories

Earnings, Trader Talk


Aluminium workers dont care about aluminium prices
Gumby on 2012-08-27 17:42:27
Mark as Spam | Reply to this comment

as long as they still get paid to overproduce... The workers has to own up to the fact one day that their smelters has to shut down thanks to 85 cents a pound that cannot pay even workers' wages... The aluminiujm workers are fooling themselves for thinking that they are helping their brothers elsewhere in metal bending plants survive on cheap aluminium. This is what it is all about... Metal thieves pop out of nowhere to steal metals when prices goes up.. How can we get out of that cheap mess?

Itch to overproduce aluminium is still here
Gumby on 2012-08-27 17:37:51
Mark as Spam | Reply to this comment

Why is it that when aluminium prices go up a little bit before everybody start jumping in to overproduce all over again.. We still have more than fourmonths of overhang to work off. which translates into eternity !! Nobody can make money at less than $2 a pound and what are we still doing at 85 cents a pound still ? We are idiots or what?

It is O.K. Corral gunslinging time for aluminium
Gumby on 2012-08-27 17:32:37
Mark as Spam | Reply to this comment

It looks like the aluminium players is carefully backing away from overprouduction without getting shot in the back.

Add Your Comment