Deripaska sees rising aluminium demand
Rusal chief executive Oleg Deripaska said yesterday he expected Chinese consumption of aluminium to match Japan's, adding that his company had no plans to decrease production capacity despite depressed commodity prices globally.
Speaking at a ceremony marking the launch of a five-year joint research project between Rusal and the Hong Kong University of Science and Technology, Deripaska made the case for continuing demand for aluminium from emerging markets, particularly China, which he pointed out was already the world leader in car production.
He said he believed per-capita consumption of aluminium in China, which is around 10kg, will catch up with Japan's level of 30kg. In contrast, India's consumption continued to lag far behind because of a lack of infrastructure, he said.
Despite aluminium prices standing at only 65 per cent of their peak in 2008, Rusal would not be cutting back on production capacity.
'The price is affected by the global financial situation, but physical demand is still extremely strong,' Deripaska said.
While high prices helped promote investment in the company, more moderate prices allowed customers to better promote their products, he said.
Rusal has seen a 46 per cent increase in turnover in the Russian market so far this year.
Deripaska said it would be logical for the company to increase its supply to Asia from 20 per cent to 30 per cent, affirming comments made by Rusal's first deputy chief executive, Vladislav Soloviev, on Wednesday to Japanese media.
Deripaska said the proximity of Rusal's Siberian smelting operations to China - it takes only six days to transport aluminium by rail to Shanghai - would help boost the company's supply and stressed that demand in Asia was not only being driven by China, but also South Korea and Japan.
Responding to comments made by Andrei Kostin, the head of VTB Bank, Russia's second-largest bank, on Wednesday that the Hong Kong stock exchange should ease trading restrictions on Rusal, Deripaska said he was 'looking forward to seeing when the limit on local trading will be improved' as it would be a 'benefit to shareholders'.
Retail investors are barred from investing in Rusal.
The company donated US$1.5 million to HKUST to fund the joint research project, which will provide exchange opportunities for students. Rusal and the university will also be working on developing an aluminium-based building material for energy-saving purposes.
According to research from the university, buildings consume 90 per cent of the electricity in Hong Kong, compared with 40 to 50 per cent in the US and the European Union, with almost half of that coming from air-conditioning and ventilation.