Aluminium producer Rusal is seeing a 70-80 per cent cut in demand from customers, after the market slowed down in April due to the COVID-19 pandemic. The news came after Roman Andryushin, Rusal’s head of sales and marketing, told Reuters that its customers are returning with 20-30 per cent of their usual demand.
Rusal, the world’s largest aluminium producer outside China, has been dealing with a drop in demand for the metal from some of its major consumers, primarily from car and aviation industries. But the second quarter of 2020 is likely to be the worst of the crisis.
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Andryushin estimates that the second quarter of 2020 to be even worse than the fourth quarter of 2008 when the purchase sentiment on the London Metal Exchange (LME) was at the lowest due to the global financial crisis.
"It turned out that this situation would be far from the worst, as this April made clear," said Andryushin.
He hopes that 50 per cent of the company’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)," said Andryushin.
He pointed out that the production shut at aluminium-consuming industries was primarily responsible for demand degrowth of Rusal’s aluminium. Car and aviation industries, the major consumers of Rusal’s aluminium, were the hardest hit by the impact of the coronavirus crisis. However, Rusal managed to increase supplies to industries that were relatively less affected by the COVID-19, such as food packaging, cans for drinks, and foil.
Now, as the market is improving with the lift of the lockdown restrictions, China has become a major importer of Rusal aluminium.
"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 2021-22 looks more optimistic.
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