Deripaska Says Aluminum Plants Will Shut Globally
OREANDA-NEWS. June 28, 2010. Oleg Deripaska, the Russian billionaire who controls the largest aluminum producer, said 70 percent of smelters globally are unprofitable after the price slumped, and a deficit may occur due to forced shutdowns.
Producers may shut 2 to 3 million metric tons of capacity in the second and third quarters, which may lead to a "deficit of physical supply," said Deripaska, chief executive officer of United Co. Rusal, in an interview.
Aluminum prices have slumped 20 percent during the past two months in
"It's a climate of short sell," said Deripaska. "It's he hedge funds and others just playing their games. We can see hysical demand is very strong."
Aluminum for three-month delivery rose 0.9 percent to
Investor concerns about the euro, which has contributed to tumbling commodity prices, is unjustified, Deripaska said. A weaker euro will help manufacturing in
The fall in the price of aluminum is 60 percent because of financial investors, he said. It jars with a seven-year high for premiums on top of the London Metal Exchange aluminum price that clients pay for delivery of the metal, Deripaska said.
The premiums for the metal over the LME price make it more attractive to sell aluminum to consumers than to investors in exchange-traded funds, he said. The pricing situation may change within the next six months, Deripaska said.
Rusal, which has USD 12 billion of net debt, is likely to earn dividends of about USD 333 million from its 25 percent stake in OAO GMK Norilsk Nickel,