OREANDA-NEWS. UC RUSAL (SEHK: 486; Euronext: RUSAL/RUAL; Moscow Exchange: RUAL/RUALR), a leading global aluminium producer, announces its operating results for the first quarter 2016 (“1Q16”).

 Key highlights 

Aluminium

·         Aluminium production in 1Q16 totalled 916 thousand tonnes (-0.5% QoQ). The smelters’ utilization rate was on average 95%. Russia Siberian smelters accounted for 94% of total aluminium output.

·         1Q16 aluminium sales increased by 9.2% QoQ to 957 thousand tons. This growth in sales is largely explained by the seasonal factors (lower sales in 4Q15 during the winter season) and the addition of primary aluminium produced at Boguchansky aluminium smelter (BoAZ) (the plant is currently operating in the test mode).

·         The share of VAP in total aluminium sales declined to 41% in 1Q16 (vs 45% in 4Q15) amid higher sales of primary aluminium. The volume of VAP sold remained largely flat.

·         In 1Q16, the aluminium realised price reduced by 3.6% QoQ to USD1,666/tonne amid a reduction in average aluminium London Metal Exchange (“LME”) QP prices and the average premium. The delayed recognition of market premium benchmarks in the realized premiums and lower share of VAP in the product portfolio were largely behind the premium decline. 

Alumina

·         In 1Q16, total alumina production was 1,873 thousand tonnes (-1.7% QoQ). Alumina production at non-Russian operations decreased by 4.3% QoQ to 1,196 thousand tonnes due largely to scheduled repairs performed at the production facilities (in particular at the Nikolaev Alumina Refinery and the Aughinish Alumina Refinery). Output at RUSAL’s Russian operations increased by 12.4% QoQ to 677 thousand tonnes amid an improved performance at the Achinsk Alumina Refinery. 

Bauxite

·         In 1Q16 bauxite output increased by 5.6% QoQ to 3,009 thousand tonnes driven largely by an improved performance in Timan and Guyana mines. Nepheline ore production at Kiya Shaltyr in 1Q16 increased by 16.7% QoQ to 1,111 thousand tonnes amid higher demand from the Achinsk Alumina Refinery.

 Market review

·         Aluminium was the largest gainer across base metals in March. The LME aluminium price increased by USD86.5/tonne to USD1,635/tonne, the highest level since July 2015.This was attributed to the on growing metal supply tightness and very limited restarts in China due to high associated costs and strict controls by official Chinese authorities.

·         According to CRU, world (ex-China) aluminium production in March 2016 slowed as a result of capacity closures in 4Q15-1Q16, which has started to influence the market. Daily average primary aluminium production in March 2016 declined by 0.8% MoM to 73.04 thousand tonnes, on a yearly basis it increased by only 1.4% YoY. The major monthly decline was observed in North America.

·         LME stocks continued to decline in 1Q16 by 1.152 mn tonnes compared to 1Q15 to 2.67 mn tonnes.

·         Chinese aluminum production in 1Q16 slowed down to 7.170 mn tonnes, a decline of 5% YoY compared to 7.556 mn tonnes in the same period last year. According to CNIA’s data, aluminum stocks in China’s largest warehouses have declined by 421 thousand tonnes in 1Q16 versus 1Q15.

·         In 1Q2016, China’s exports of aluminium semis declined 12.4% YoY (days adj.) to 948 thousand tonnes as compared to 1.070 mn tonnes in the same period of 2015.

·         Additional positive factors resulted from the stronger macro situation in China, as new credit, industrial output, fixed-asset investment and retail sales all picked up in March. House prices in China advanced at the fastest pace for nearly two years in March 2016, led by rises in Shenzhen and Shanghai. Average house prices in 70 Chinese cities climbed 4.9% YoY in March 2016, compared to a 3.6% rise in February 2016.

·         China’s economy stabilized last quarter and gathered pace in March. GDP rose strongly to 6.7% in the first quarter 2016. 

Key operating data

(‘000 tonnes)

 

1Q16

4Q15

Change, % (QoQ)

1Q15

Change, % (YoY)

 

 

 

 

 

 

 

Aluminium

 

916

921

-0.5%

900

1.7%

Aluminium foil and packaging products

 

18.8

22.4

-15.9%

22.5

-16.4%

Alumina

 

1,873

1,906

-1.7%

1,808

3.6%

Bauxite

 

3,009

2,850

5.6%

2,956

1.8%

Nepheline

 

1,111

952

16.7%

1,066

4.2%

 

Sales data

(‘000 tonnes)

 

1Q16

4Q15

Change, % (QoQ)

1Q15

Change, % (YoY)

 

 

 

 

 

 

 

Aluminium sales

 

957

876

9.2%

935

2.7%

incl. BoAZ aluminium product sales

 

39

12

—

—

—

Aluminium realized price, USD/tonne

 

1,666

1,729

-3.6%

2,299

-27.5%

Share of VAP

 

41%

45%

-4.0 p.p.

39%

+2.0 p.p.

 

Aluminium production results

 

(‘000 tonnes)

 

Interest

1Q16

4Q15

Change, % (QoQ)

1Q15

Change, % (YoY)

Russia (Siberia)

 

 

 

 

 

 

Bratsk aluminium smelter

100%

251

253

-1.1%

248

1.0%

Krasnoyarsk aluminium smelter

100%

256

257

-0.6%

250

2.4%

Sayanogorsk aluminium smelter

100%

130

130

-0.1%

131

-0.5%

Novokuznetsk aluminium smelter

100%

53

53

-0.4%

51

4.2%

Irkutsk aluminium smelter

100%

103

104

-0.7%

101

1.5%

Khakas aluminium smelter

100%

73

74

-0.7%

71

2.9%

Russia — Other

 

 

 

 

 

 

Nadvoitsy aluminium smelter

100%

3

3

4.9%

3

7.4%

Kandalaksha aluminium smelter

100%

17

17

0.4%

16

3.1%

 

 

 

 

 

 

 

Sweden

 

 

 

 

 

 

Kubikenborg Aluminium (KUBAL)

100%

30

29

3.7%

29

5.6%

 

 

 

 

 

 

 

Total production

 

916

921

-0.5%

900

1.7%

 

 

 

 

 

 

 

Remelting of third-party primary aluminium at Volgograd smelter

 

12

8

48.8%

3

—

 

 

 

 

 

 

 

Total aluminium products output including remelting

 

928

929

-0.1%

904

2.7%

 

Alumina production results

 

(‘000 tonnes)

 

Interest

1Q16

4Q15

Change, % (QoQ)

1Q15

Change, % (YoY)

Ireland

 

 

 

 

 

 

 

Aughinish Alumina

 

100%

488

514

-5.2%

488

-0.1%

 

 

 

 

 

 

 

 

Jamaica

 

 

 

 

 

 

 

Alpart

 

100%

—

—

—

—

—

Windalco

 

100%

154

156

-1.5%

149

3.5%

 

 

 

 

 

 

 

 

Ukraine

 

 

 

 

 

 

 

Nikolaev Alumina Refinery

 

100%

370

389

-4.7%

353

5.0%

 

 

 

 

 

 

 

 

Italy

 

 

 

 

 

 

 

Eurallumina

 

100%

—

—

—

—

—

 

 

 

 

 

 

 

 

Russia

 

 

 

 

 

 

 

Bogoslovsk Alumina Refinery

100%

235

245

-4.0%

220

7.1%

Achinsk Alumina Refinery

 

100%

244

217

12.4%

224

9.0%

Urals Alumina Refinery

 

100%

197

195

1.1%

190

3.9%

Boxitogorsk Alumina Refinery

100%

—

—

—

—

—

 

 

 

 

 

 

 

 

Guinea

 

 

 

 

 

 

 

Friguia Alumina Refinery

 

100%

—

—

—

—

—

 

 

 

 

 

 

 

 

Australia (JV)

 

 

 

 

 

 

 

Queensland Alumina Ltd

 

20%

184

190

-2.9%

185

-0.2%

 

 

 

 

 

 

 

 

Total production

 

 

1,873

1,906

-1.7%

1,808

3.6%

 

Bauxite mining results

 

(‘000 tonnes wet)

 

Interest

1Q16

4Q15

Change, % (QoQ)

1Q15

Change, % (YoY)

Jamaica

 

 

 

 

 

 

 

Alpart

 

100%

44

21

106.1%

—

—

Windalco

 

100%

488

465

4.9%

513

-4.8%

Russia

 

 

 

 

 

 

 

North Urals

 

100%

551

561

-1.9%

684

-19.5%

Timan

 

100%

683

576

18.7%

604

13.1%

 

 

 

 

 

 

 

 

Guinea

 

 

 

 

 

 

 

Friguia

 

100%

—

—

—

—

—

Kindia

 

100%

925

934

-1.0%

863

7.1%

 

 

 

 

 

 

 

 

Guyana

 

 

 

 

 

 

 

Bauxite Company of Guyana Inc.

 

90%

319

293

8.9%

291

9.6%

 

 

 

 

 

 

 

 

Total production

 

 

3,009

2,850

5.6%

2,956

1.8%

 

Nepheline production

 

(‘000 tonnes wet)

 

Interest

1Q16

4Q15

Change, % (QoQ)

1Q15

Change, % (YoY)

 

 

 

 

 

 

 

 

Kiya Shaltyr Nepheline Syenite

 

100%

1,111

952

16.7%

1,066

4.2%

Total production

 

 

1,111

952

16.7%

1,066

4.2%