Integrated company "Rossiysky alyuminy" declared operational results of the first quarter 2017

Integrated company "Rossiysky alyuminy", one of the world's largest producers of aluminum, declares results of operating activities of companies in the first quarter 2017.

Main results:

Following the results of work in 1 quarter 2017 the volume of productions commodity aluminum on Sayanogorsk and Khakass aluminum plants remained at the level of 1 quarter 2016. As a whole following the results of 1 quarter 2017 of SAZ and HAZ made 202,5 thousand tons of aluminum, thus production alloys and other production with a high value added made 50,3% of the total amount of production.

Aluminium

• the Volume of productions aluminum ^[2] in the first quarter 2017 made 910 thousand tons, having decreased by 2,1% in comparison with the fourth quarter 2016. On plants of companies, located in Siberia, 94% of the total amount of production of aluminum were necessary. As a whole the general production dynamics is explained by smaller number of calendar days in the reporting period (90 days in the first quarter 2017 against 92 days in the fourth quarter 2016). The coefficient of loading of capacities averaged 95%.
• the Volume of realization of aluminum in the first quarter 2017 made 985 thousand tons, having increased by 6,8% in comparison with the fourth quarter 2016. Production with a value added (PDS ^[3] ) made 436 thousand tons in a total amount of realization that is 7,8% more in comparison with the fourth quarter 2016. Dynamics of sales of aluminum in the reporting period generally is explained by realization of the commodity stocks which have been saved up in the fourth quarter 2016.
• the Average price of realization of aluminum ^[4] in the first quarter 2017 grew by 8,3% in comparison with the last quarter – to 1 949 US dollars for ton that is connected with growth of the average price of aluminum on LME taking into account the quoted period ^[5] for 9% in comparison with the fourth quarter 2016 – to 1 796 US dollars for ton. The average realized award in the first quarter 2017 reached 153 US dollars for ton that is 1,4% higher than value of this indicator last quarter.

Alumina

• the Volume of productions alumina in the first quarter 2017 made 1 889 thousand tons, having decreased by 2,6% in comparison with the fourth quarter 2016. Production at the Russian plants provided 37% of total amount of release. Production at the aluminous enterprises of companies corresponded to planned volumes. Influence of seasonal repair work on volumes of productions at the aluminous enterprises Windalco, Aughinish Alumina and Theological aluminum factory was compensated by volumes of productions JOINT-STOCK COMPANY "RUSAL ACHINSK" and the Ural aluminum plant.
• Growth of volumes of productions on Nikolaevsk aluminous plant and Uralsk aluminum plant in the first quarter 2017 in comparison with the first quarter 2016 is caused by completion of modernization of capacities at these aluminous enterprises.

Bauxites and nepheline ore

• bauxite mining Volume in the first quarter 2017 made 2 869 thousand tons, having increased by 1% in comparison with the fourth quarter 2016. The volume of production of nepheline ore for reporting quarter increased by 7,9% – to 1 056 thousand tons. Production volumes at the Timman's Bauxite enterprise and Kia-Shaltyrsky nepheline mine ^[6] increased by 8% and 7,9% respectively. Growth of production of raw materials corresponded to production plans of the Ural aluminum plant and JOINT-STOCK COMPANY "RUSAL ACHINSK". Production volume on Severouralsk boksitovy mine also was caused by production plans Theological aluminum factory. Volumes of production of Companies bauxites Prefecture of Kindia (Compagnie des Bauxites de Kindia) in the first quarter 2017 remained below average historical value, however, according to the schedule of mining operations, the increase in volumes of production in the second quarter 2017 is expected. Volume of production of Companies bauxites of Gyana (Bauxite Company of Guyana Inc. ) increased by 13,2% in comparison with the last quarter that in many respects is explained by effect of low base.

the market ^[7]

• In the first quarter 2017 the world economy showed to

  a steady growth and increase in business activity. The highest rates were observed in the countries with developed economy. Consumer expenses on acquisition of cars, goods long using, and also investments in fixed capital remain the main drivers of demand for metals.

• In the countries of the eurozone expenses of households increased, unemployment rate decreased, level of consumer confidence grew, and interest rates remained at a low level. It is expected that growth of investments in fixed capital to United States of America in 2017 will make 3,5% in comparison with 2016. Growth of investments is connected with expectations of approval of the plan of the government on development the infrastructures, assuming expenses of 1 trillion US dollars. To Japan growth of industrial productions proceeds, thus it is expected that export in 2017 will increase by 4,5% in comparison with previous year that promoted by a great demand in next China.
the Chinese economy at the beginning of a year showed to
• a steady growth. Value of the PMI index in March, 2017 reached 51,8 points while industrial production in March 2017 grew by 7,6% in comparison with the similar period of last year. GDP growth China in the first quarter 2017 in comparison with the first quarter 2016 made 6,9% instead of expected 6,8%.
• of the Price of aluminum on LME in March, 2017 were reached by 1 955 US dollars for ton, having stabilized in the first quarter at the level of higher than 1900 US dollars for ton. It is connected with growth of deficiency of metal in the market which happens under the influence of United States of America, Europe, and also to expectation of recession of the offer in China against essential increase in cost of productions.

by

• of the Award on aluminum in the key markets continued to be restored in the first quarter 2017, having increased on the average by 27,8% in comparison with the fourth quarter 2016. Growth of awards was observed against a great demand at the same time with decrease in the offer in key regions in connection with reduction/closing of capacities in North America and Australia.
• the Level of reserves of aluminum in the markets out of China in March, 2017 came nearer to pre-crisis levels of 3,6 million tons that corresponds to 46 days of consumption against 110 days of consumption in 2014-2015. Stocks continue to decrease fast rates.
• By CRU estimates, demand for aluminum out of China in the first quarter 2017 grew by 3,4% in comparison with the first quarter 2016 – to 7,1 million tons. Production aluminum (including production in eight countries which are not providing the reporting) in the first quarter 2017 grew by 1,2% in comparison with the first quarter 2016 – to 6,7 million tons that provided deficiency in the aluminum market out of China of about 400 thousand tons.
• according to CNIA (The Chinese association of the industry of non-ferrous metals), production primary aluminum in China in the first quarter 2017 grew by 14,2% in comparison with the first quarter 2016 and made 8 191 thousand tons. However in annual calculation volumes of productions decrease: in February, 2017 production decreased by 4,9% in comparison with the last month, and in March – for 3,5% in comparison with the last month. These data can testify to the beginning of alignment of supply and demand in China in connection with policy of the central government on strict control situations with overproduction.
• on April 12, 2017 as an additional regulating measure a number of the profile ministries and departments China ^[8] in common issued the resolution "About Work on Situation Streamlining with Illegal Projects in the Industry of Primary Aluminium". In a preamble of the document it is spoken about need of standardization of investments in construction of aluminum capacities and strict controls behind overproduction. The government of the district of Changji (Xinjiang Uyghur Autonomous Region) issued subsequently the notice of illegality of construction of three aluminum plants with a total power of 2 million tons of aluminum a year and need of an immediate stop of construction of these projects. The risk of a stop or termination of work remains concerning some other projects and capacities.
• Besides, the essential growth of costs of productions aluminum in China, the exceeded 40% in the first quarter 2017, and the proceeding pressure upon prime cost mainly from the prices of carbon raw materials, significantly affected not integrated Chinese producers of aluminum working with low profitability or losses.

^[9]

of one thousand tons

the 1st quarter 2017

the 4th quarter 2016

the Change, 1 quarter to the 4th quarter, %

the 1st quarter 2016

the Change, 1 quarter to 1 quarter. %

Alyuminy

910

930

-2, 1%

916

of-0,6%

zagruzki

95%

95%

of 95%

Foil and packing

23,1

22,5

of 2,8%

18,8

of 22,9%

<" 165">

Alumina

1 889

1 939

of-2,6%

1 873

of 0,4%

Bauxites

2 869

2 841

of 1,0%

3 009

of-4,6%

Nepheline ore

1 056

978

of 7,9%

1 111

of-5,0%

Data on realization

by

of one thousand. tons	the 1st quarter 2017	the 4th quarter 2016	the Change, 1 quarter to the 4th quarter, %	the 1st quarter 2016	the Change, 1 quarter to 1 quarter. %
aluminum Realization, including,	985	922	of 6,8%	957	of 2,9%
aluminum realization, of the % made on BoAZe	33	31	6,0	38	of-14,2%
realization of the aluminum made by the third storonami	46	39	18, 5%	5
PDS Realization (the realization Price is considered in a total amount of realization of alyuminiya)	436	405	7,7 of %	390	of 11,7%
, dollars of the USA/ton	1 949	1 799	of 8,3%	1 666	of 17,0%

Forward-looking statements

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