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Russian aluminium giant Rusal on Monday reported a net loss of $55 million for 2012, as the firm said it would cut production following lacklustre demand for the metal and falling prices.
The world's largest aluminium producer fell into the red for the fiscal year ending December 31, 2012, compared with a net profit of $237 million in 2011, the Moscow-based firm said. Revenue fell 11.4 percent to $10.89 billion.
"2012 remained particularly challenging for the aluminium industry," its chief executive Oleg Deripaska said in a filing to the Hong Kong stock exchange, where the firm is listed.
He said although the global aluminium consumption rose by six percent in 2012 to 47.4 million tons, prices fell 15.7 percent year-on-year due to "negative investor sentiment".
"The unfavourable market conditions and lower LME (London Metal Exchange) price has inevitably impacted the operating results of the company," he added.
Rusal said it expects to cut approximately 300,000 tons of aluminium production capacity at its "less efficient aluminium smelters" by the end of 2013 to improve efficiency.
The price of aluminium, which is used in industries including automotive and construction, is trading around $1,975 a ton on the London Metal Exchange, down 15.2 percent from a year ago.
Rusal said it expects the global aluminium market to be "balanced" this year, with growth to be led by China and India, as the global primary aluminium consumption is forecasted to grow 6 percent to 50 million tons this year.
"(Rusal) expects that the uncertainties seen in 2012, namely the current eurozone financial crisis and slowdown in Chinese growth, will lessen during 2013," the firm said.
The announcement comes after Russian investigators last week said they were searching the Moscow offices of Rusal as part of a probe into alleged tax violations, a claim that the firm has dismissed as groundless.
Rusal's share price plunged 2.98 percent to HK$4.24 ($0.55) on the Hong Kong bourse at noon.