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HONG KONG/MOSCOW, Feb 5 (Reuters) - Russian aluminium giant Rusal plans to boost the share of value-added products (VAP) to 50-52 percent of total aluminium sales this year from 47 percent in 2017 because of strong demand and its new VAP capacity, it said on Monday.
Hong Kong-listed Rusal, the world's second-largest aluminium producer behind China's Hongqiao, has been increasing the share of VAPs such as alloyed aluminium ingots, slabs, billets and wire rod in its sales in recent years because of increasing demand from the transport, construction and computer industries.
In the final quarter of 2017, sales of VAPs stood at 462,000 tonnes, down 3.4 percent quarter on quarter because of a skew towards primary aluminium under existing contracts, leading to a decline of VAPs' share of total sales to 46 percent, Rusal said in a statement.
Total aluminium sales rose 3.6 percent to 3.955 million tonnes in 2017, while the average realised price jumped by 21.5 percent to $2,105 a tonne.
Rusal, controlled by Russian businessman Oleg Deripaska via his En+ Group, plans to report 2017 financial results on Feb. 23.
Its shareholders also include Russian billionaires Viktor Vekselberg and Mikhail Prokhorov as well as trading giant Glencore. The latter plans to swap its 8.75 percent stake in Rusal for shares in En+ by the end of March, En+ has said.
Glencore is also Rusal's largest customer by total sales. Their current seven-year supply contract will terminate at the end of 2018, Rusal has said in the prospectus for a recent Eurobond issue.
"If the Group is unable to reallocate the capacity presently purchased by Glencore to other customers following the expiration of the contract or is unable to enter into a new contract with Glencore on similar terms, the Group's business could be affected," Rusal said in the prospectus.
Taking into account current trends in the global aluminium market, Rusal does not foresee any problems with sales of its products, it told Reuters on Monday when asked to comment on the Glencore contract. It did not elaborate.
Rusal estimated that global aluminium demand grew by 6 percent year on year to 64 million tonnes in 2017 amid strong demand across all regions, leaving the global market in a deficit of about 1 million tonnes, it said on Monday.
Demand for aluminium in China grew 7.8 percent to 34.9 million tonnes, Rusal said.
The company's shares eased by 0.5 percent in Hong Kong on Monday. That compared with a 1 percent fall in the benchmark Hang Seng index. (Reporting by Donny Kwok in Hong Kong and Polina Devitt in Moscow; Editing by Richard Pullin and David Goodman)