MOSCOW (Reuters) – Russia’s Rusal has resumed construction of its long-stalled Taishet aluminum smelter project in Siberia in expectation of a widening global aluminum deficit, the company said on Wednesday.
The world’s second-largest aluminum producer behind China’s Hongqiao needs a further $700 million to complete the project, having invested about $800 million in Taishet before it was halted because of falling aluminum prices.
Aluminum prices have jumped by 12 percent to $1,887 a tonne since the start of January and Rusal expects them to climb above $1,900 by the end of the year, said Deputy Chief Executive Oleg Mukhamedshin, citing the company’s belief that the global deficit will reach 1.8 million tonnes in 2018, up 500,000 tonnes this year.
The deficit expectations are largely down to top producer China’s decision to order steel and aluminum producers in 28 cities to make heavy output cuts during the winter as Beijing intensifies its war on smog.
“In this respect, we have a large competitive advantage related, above all, to the fact that we have resumed the Taishet aluminum smelter construction,” Mukhamedshin told reporters in Moscow.
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