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. Last Updated: 07/27/2016

Production of Aluminum To Drop, Exports to Rise

Russia on Friday promised to meet a global deal to cut aluminum production but predicted a rise in exports, half of which comprises metal produced in Russia on outsiders' behalf.

Anatoly Shleyev, head of the statistics department at the state metallurgy committee, said Russia had cut aluminum output by about 7 percent by the start of August from levels seen before a January deal on output cuts.

"We promised to cut production by 500,000 tons this year and I think we will be able to fulfil this promise," Shleyev said.

But he said Russian aluminum exports, including tolled metal, were likely to be about two million tons in 1994, up from last year's 1.6 million tons.

He said Russia had exported 1.1 million tons of aluminum in the first six months of this year, up from about 800,000 tons in January to June 1993.

Half the aluminum exports were of metal produced in tolling operations, where Russian firms refine metal on behalf of outside clients, he said.

Dealers on the London Metals Exchange said news that Russia expected to meet its output cut commitments was welcome. But the positive market impact was tempered by the news on exports.

Under January's deal, aimed at resolving a problem of oversupplied markets, Russia pledged to cut aluminum output in two stages -- by an annual 300,000 tons by April and by another 200,000 tons over the next three months.

But industry officials here have said the cuts are lagging due to technical difficulties and other countries' slow compliance with the agreement.

Western producers blame high Russian aluminum exports for depressing world prices, but industry officials deny the charge, saying that most exports are of metal tolled in Russia.

Domestic consumption of aluminum has fallen sharply in recent years amid a slump in demand from the key military sector. But Russian officials say there are encouraging signs that it is picking up.

They say smelters are starting to receive more orders for aluminum, especially from auto and machine-building industries.

Another senior official at the metallurgy committee said Russia would hold talks with officials from the European Union in Brussels on Sept. 12-15 on projects to reconstruct four major aluminum smelters.

Leonid Shevelyov, deputy head of the committee said the plans aimed to raise smelters' output for domestic consumption.

Shevelyov said the talks would deal with plans to modernize the world's biggest aluminum smelter in Bratsk, with annual capacity of 820,000 tons, as well as smelters in Krasnoyarsk (750,000 tons), Volgograd and Bogoslovsk.