"Oversupply forces aluminium industry cuts"

From the Financial Times:

Two of the world’s three biggest aluminium producers have announced cuts to production in the latest sign of how weak prices and oversupply are weighing on the industry.

US company Alcoa said on Monday it was shutting its 190,000 tonne-a-year Point Henry smelter in Australia since the plant had “no prospect of becoming financially viable”. Two rolling mills there will also be permanently closed. Alcoa’s total closures or curtailments to production now represent 551,000 tonnes of capacity, or around 1 per cent of world supply of the metal.

At $1,765 a tonne, the London Metal Exchange price for three-month delivery is 43 per cent lower than the 2008 peak, and below the production cost of many smelters globally. Strong demand for the metal, which is used in everything from beverage cans to car bodies and construction, has not supported the price because large increases in capacity in China and the Middle East helped keep the market in surplus from 2007 to 2013. Vast warehouse stocks of aluminium – at least 10m tonnes, much of it tied up in financing deals – have put further pressure on prices....MORE