Russian aluminum giant Rusal warned against Chinese smelters restarting plants to keep from undermining prices that have retreated from 2016 highs as Chinese producers consider launching a fund to deal with the layoffs from closures. Global aluminum prices that rebounded to nine-month highs last month have enticed some Chinese smelters that closed in the past year amid overcapacity in the sector to resume production. But, while analysts say the restarts have been slow, producers fear they could weigh on prices again. China is the world's top consumer and maker of aluminum.Chinese producers should continue to keep their discipline toward production to "ensure gradual improvement in prices and profitability," Rusal's Deputy Chief Executive Oleg Mukhamedshin told an industry conference on Tuesday.
There had been instances in the past when Chinese smelters restarted output as prices bounced to make immediate profits, but it's turned out that is not helpful to prices, said Mukhamedshin.
Aluminum on the London Metal Exchange was trading at $1,566.50 a tonne on Tuesday, down from this year's peak of $1,686 reached on April 29.
China's aluminum producers pledged to shut 4.6 million tonnes per year of capacity, or about 10 percent of smelting, amid plunging prices for the metal. Aluminum prices on the Shanghai Futures Exchange fell for six straight years before staging a pick-up this year.
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