Global aluminum price decline has nothing to do with China's economy due to overcapacity
International aluminum prices have now fallen to new lows since July 2009. Russia's largest aluminum producer, Russian Aluminum (hereinafter referred to as RUSAL), believes that the current decline in aluminum prices has nothing to do with China's economic slowdown, but caused by oversupply.

Mr. Oleg Muhammadshin, Vice President of RUSAL, expressed this view in an exclusive interview with Tencent Finance.

Due to the slowdown in China's economy, prices of many commodities, such as iron ore and coal, have fallen sharply. Taking imported iron ore prices as an example, prices have plummeted by nearly 50% in 2014, and since 2015, the decline has exceeded 30%.

“Not all falling commodity prices are directly related to China’s economic downturn.” Oleg Muhammadshin said that the logic of the fall in aluminum prices is clearly not the case, “because the demand for aluminum is still strong. Whether it is from the Chinese market Or the demand in the global market is very strong."

Oleg Muhammadshin said that China's consumer demand is higher than 10%, while demand in the United States has increased by 4% and Europe has grown by more than 2%.

According to Oleg Muhammadshin, the biggest problem in the aluminum industry is not demand but production. "The aluminum industry is always a new production company to join the market, resulting in overcapacity."

According to the report of the China Nonferrous Metals Association Aluminum Branch, the production capacity of China's aluminum will increase by about 5 million tons in 2015. In 2014, the global primary aluminum production was about 53.9 million tons, and the consumption was about 54.85 million tons.

Regarding how to solve the oversupply, Oleg Muhammadshin said that all aluminum producers should re-group their assets, “it should close out the unproducible outdated capacity.” Rusal has closed nearly 700,000 tons of low It is not effective in environmentally friendly electrolytic aluminum production capacity, and plans to close another 200,000 tons of production capacity in the future.

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