Rusal CEO: 'Last Act of Drama' in Commodity Market
Oleg Deripaska, the CEO of the world's largest aluminum company Rusal said global commodity producers need to cut output by up to 10 percent to bring the market back to balance.
"At the moment in many industries not just aluminum, [but] steel, cement, nickel we have a very urgent call to reduce output because the financial crisis created huge distortions in terms of demand," Deripaska told CNBC Europe's "Closing Bell" in London.
"We are seeing maybe the last act of the drama when a lot of CEOs with a very good career were punished last year because of shareholders suffering on the return on their investments and I think this has created a very important shift of paradigm," Deripaska added.
"We produce so much product which currently occupies warehouse [space] around the world and at the moment we should take a significant reduction, up to 10 percent. Of course, it's different for different industries," Deripaska said of the commodity market.
Rusal reported a 2012 loss of $55 million last week and said it would cut its output by 300,000 by the end of 2013. The company's Hong Kong-listed shares have fallen nearly 30 percent over the past year, while the Hang Seng index has risen 6 percent over the same period.
Aluminum prices have fallen on signs increasing output in China. That could worsen a global glut after production exceeded demand last year.
The aluminum industry made up of just 5 big players globally should heed the market message and cut marginal production, he said.
"We need to reduce output because by doing that we can restore confidence in our market, which right now is very negative."