ALCOA-ALUMINA VENTURE CUTS OUTPUT TARGET ON SLOW DEMAND
FOR ALUMINIUM
DATE: 03/05/2012
Alumina owns 40% of the Alcoa World Alumina & Chemical venture, while Alcoa holds the remaining stake. The venture produces about one-quarter of the world's alumina, which is refined into aluminum. Alumina also controls 40% of the Point Henry aluminum smelter in the Australian state of Victoria.
United Co. Rusal, the world's largest aluminum producer, said last month it's looking at the possibility of closing smelters as prices decline. Alcoa, the largest U.S. aluminum producer, cut 12% of capacity in January and said April 11 the reductions “may not be the end.” Aluminum has fallen 25 percent in the past 12 months in London.
The weakening in aluminum pricing is largely a reflection of slowing demand growth for the metal, in particular in Europe. This has led to curtailments at high-cost smelters, mainly in Europe.
Indonesia's plan to curb exports of unprocessed metal ores may not boost prices in the short term because the policy is unlikely to be immediately implemented on a large scale. In the long term, such restrictions may open up opportunities for the venture to start selling its bauxite overseas.
Alcoa in January announced the closure of plants in the U.S., Spain and Italy, cutting 531,000 tons of aluminum capacity. The company also said last month it will reduce output of alumina by 390,000 tons.
POWERED BY: COMMODITY INSIGHTS
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