Aluminum demand hit but recovery ahead: Rusal

A poor price environment in the aluminum market hit Rusal hard in the fourth quarter but demand should increase, the deputy chief executive officer of the world's largest aluminum producer, Rusal, told CNBC.

"Talking about our fourth quarter results it's important to understand that the price environment was quite pessimistic," Oleg Mukhamedshin said on Wednesday.

Earlier on Wednesday, Russia-based Rusal reported a 53 percent decline in fourth quarter core profit as weak aluminum prices hit the metal producer hard. For 2015 as a whole, the producer swung to a net profit of $558 million compared with a net loss of $91 million in 2014.

Rusal added that in the fourth quarter, the aluminum price reached an average of $1,495 per ton, a 24 percent decrease compared to $1,968 in the same quarter of the previous year.

"Our realized sales price dropped by nearly 6 percent quarter on quarter and obviously it impacted our bottom line and EBITDA figure," Mukhamedshin said.

Giving an outlook for the aluminum market in 2016, Rusal expects to see demand grow at a "healthy 5.7 percent" in 2016 "as a result of a strong demand growth in North America, Europe and Asia," it said in its earnings statement. It also expected Chinese growth "to continue to be strong" at 7 percent year-on-year in 2016.

Mukhamedshin told CNBC that the market was stabilizing.

"Good news (is) that the market is more stabilized now and we can see some positive news coming from demand side and some positive news coming from China. We do not see growing exports (of aluminum) from China so it should be more positive for us."

The decline in the Russian ruble on the back of sanctions and oil price declines had helped the company's cost pressures, Mukhamedshin conceded."

"On the cost side I think we were doing quite well...but obviously once oil prices go up and we can see some improvement of ruble versus U.S. dollar it will have some negative impact on our cash cost but again we achieved quite a nice position on the industry cash cost curve...and we are probably the best aluminum company in the world in terms of our cash cost."

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