* Rusal forecasts market, excl China, will see aluminium deficit
* Russian producer will consider resuming dividend
* Says LME has “missed the boat” with premium contract (Adds comments, details)
By Silvia Antonioli
LONDON, April 27 (Reuters) - Concerns about Chinese aluminium flooding the global market are not justified, according to the deputy chief executive of United Company Rusal , the world’s top aluminium producer.
Worries about oversupply in the aluminium market have put pressure on prices of the metal use in packaging and vehicles and are forcing many producers to curb output.
Such concerns, exacerbated by rising capacity in China, have pushed Rusal’s rival Alcoa to flip its market balance forecast for this year from a deficit to a surplus.
But Rusal Deputy CEO Oleg Mukhamedshin said a surge in Chinese exports of some aluminium products in December was just a temporary phenomenon. He said he did not believe that Beijing would go ahead with its plan to remove on export tax on aluminium, which would boost its exports.
“It’s not confirmed by the government. We had a number of meetings with the ministry of commerce ... and it was clearly stated that is was against the Chinese interest,” he said on Monday, adding that China’s focus was on making aluminium products rather than exporting raw materials.
The Russian producer said it still expected the aluminium market - excluding China - to be in a deficit of almost 1.5 million tonnes this year. It did not provide a forecast which included the Chinese figures, however.
Rusal has received some relief from the fall in the value of the rouble against the dollar in the past few months, which has helped it to cut some of its hefty debt.
It said on Monday that it would consider resuming payment of a dividend if it manages to cut its net debt to earnings before interest tax, depreciation and amortisation (EBITDA) ratio from 5.8 in 2014 to 3.5 by the end of this year.
Following a similar announcement by Alcoa, Rusal has said it may idle some 200,000 tonnes of loss-making capacity on the back of weaker prices. But it said on Monday it would start producing metal at its Boguchansk project in Russia by June 2015 and could achieve an annualised rate of 150,000 tonnes by mid-2016, subject to demand.
“The important thing is that metal from Boguchansk will be produced in line with Russian consumption. If demand grows we will correct the speed of the ramp-up,” said Chief Executive Vladimir Soloviev.
Soloviev said he expected Russian domestic consumption to fall by about 5 percent this year as higher interest rates have hurt the ability of final users of aluminium to get funding and working capital.
Commenting on a new premium contract that the London Metal Exchange (LME) is planning to roll out, Rusal said the exchange had moved too slowly.
“We were advocates of the premium contract in September 2013,” said Steve Hodgson, director for sales and marketing. “The contract wasn’t launched when premiums were going up, which could have given consumers protection, it wasn’t launched when premiums started to fall, which could have given producers protection. So I think they have missed the boat.” (Additional reporting by Pratima Desai; Editing by Gareth Jones and Pravin Char)