June 1, 2020 / 10:36 AM / a month ago

Rusal's customers return with 20-30% of usual aluminium demand

MOSCOW, June 1 (Reuters) - Aluminium producer Rusal is seeing customers returning with 20-30% of their usual demand after a slump in April caused by fallout from the new coronavirus outbreak, Roman Andryushin, its head of sales and marketing, told Reuters.

Rusal, the world’s largest aluminium producer outside China, has had to deal with a drop in demand from major consumers of its metal - car and aviation industries - but the second quarter of 2020 is likely to be the worst of the crisis.

Andryushin said the second quarter of 2020 was worse than the fourth quarter of 2008 “when nobody wanted to buy anything” on the LME (London Metal Exchange) in November of that year due to the global financial crisis.

“It turned out that this situation would be far from the worst, as this April made clear,” Andryushin said.

He hopes that 50% of Rusal’s customers’ usual demand will be back in June-July.

“I hope that the second quarter will remain the worst this year ... It means that the third and fourth quarters are going to be better. But until we see real significant improvements, it’s hard to definitively estimate the extent of the decline (in demand).”

Rusal produced 3.8 million tonnes of aluminium in 2019.

Suspension of production by many aluminium-consuming industries has hit Rusal and other aluminium producers hard in March-May, Andryushin said.

Car and aviation industries were the hardest hit by the impact of the coronavirus crisis and lockdowns imposed to contain its spread. But the company managed to increase supplies to industries that were less directly affected such as food packaging, cans for drinks and foil.

The market mood is improving now as Europe, which usually accounts for 50% of Rusal’s sales, eases lockdown restrictions and China imports aluminium as the recovery there boosts trade.

“That certainly does not mean that all the problems are over,” Andryushin said. The global aluminium market is unlikely to come back to the pre-coronavirus level in 2020, but he said he was more optimistic about 2021-2022. (Reporting by Polina Devitt and Anastasia Lyrchikova; editing by Jane Merriman)

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