Dubai Aluminium Company, or Dubal, yesterday said it had not cut output after a supplier and metal traders said the firm was purchasing less raw materials.
"We are still operating at full capacity of 960,000 tonnes per year and have made no production cuts," a spokesman for Dubal said. "We have just changed our product mix." He declined to give more details.
A European alloy supplier said Dubal had reduced imports of some raw material by 30 per cent since the beginning of the year. "We supply Dubal with alloys such as copper, which are used in making the final product, but their purchasing has been down 30 per cent so far," said Michael Terehov, General Manager of Demidov Industries in Estonia.
Terehov estimated Dubal's output of primary aluminium had fallen five to 10 per cent, while output of casing aluminium had fallen about 50 per cent. Regional metal traders estimated Dubal's primary aluminium output was down 10-15 per cent.
Dubal's sales dropped by 30 per cent in the first quarter, as the global automotive industry took a hit from a slump in consumer demand due to the credit crisis, said Abdulla Kalban, Chief Executive of Dubal, last month.
Aluminium producers have taken about 15 per cent of global capacity offline to match the recessionary demand. Many are now operating below break-even levels and industry analysts forecast deeper production cuts are needed to boost prices.
"Prices still remain vulnerable to high stock levels and ideal capacity," said Massimo Rossi, a senior consultant at London-based CRU Group. "If more production cuts are implemented that would lift the price of the metal as consumption recovers."
Aluminium price has recovered to about $1,600 (Dh5,876) per tonne after it fell more than 50 per cent earlier this year.
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