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Rusal May Cut Aluminum Output 6% in Next 18 Months, CEO Says

United Co. Rusal Chief Executive Officer Oleg Deripaska
United Co. Rusal Chief Executive Officer Oleg Deripaska speaks during a television interview on day three of the World Economic Forum in Davos. Photographer: Simon Dawson/Bloomberg

Jan. 27 (Bloomberg) -- United Co. Rusal, the world’s largest aluminum producer, may cut output 6 percent in the next 18 months, Chief Executive Officer Oleg Deripaska told Bloomberg Television in Davos, Switzerland.

Alcoa Inc., Rio Tinto Group and their global rivals are cutting production after the slump in prices. Alcoa, the largest U.S. producer, reported its first loss in two years this month, and said China may use 70 percent of its capacity in 2012. Rusal has annual capacity to produce 4.7 million metric tons of the light metal a year.

Rusal is monitoring the situation and, if margins are falling, may “go downstream, adding value in producing alloys,” Deripaska said today in the interview.

Low prices may force as much as 3 million tons of global capacity to be closed or mothballed, Deripaska said last month.

Aluminum traded as high as $2,288 a ton on the London Metals Exchange today. The metal has advanced 13 percent since Jan. 1 after falling almost 28 percent last year from its May 3 peak of $2,797.

To contact the reporters on this story: Yuliya Fedorinova in Moscow at yfedorinova@bloomberg.net; Maryam Nemazee in London at mnemazee@bloomberg.net

To contact the editor responsible for this story: John Viljoen at jviljoen@bloomberg.net

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