Chalco Cuts Aluminum Production by 9% Due to Weak Prices

Aluminum Corp. of China, the largest Chinese producer of the lightweight metal, said it will temporarily shut down about 9% of its output due to market conditions, according to a regulatory filing.

Chalco, as the company is known, will cut production by about 380,000 metric tons of aluminum, according to the Securities and Exchange Commission filing dated Wednesday. The company didn't say what facilities would be closed or reduced. Most of its operations are in China.

The decision comes in response to weak aluminum prices, which hit a 3 1/2 low in May, trading close to $1,800 a metric ton.

Global aluminum production has exceeded demand from makers of beverage cans, cars and planes every year since 2005. As a result, aluminum producers have been under increased pressure to cut costs and reduce output.

Aluminum for three-month delivery, the benchmark contract traded on the London Metal Exchange, recently traded up 1% at $1,965.75 a ton, breaching $1,950 for the first time since March 25.

Chalco's move mirrors steps taken by other large aluminum makers world-wide.

Russia's United Co. Rusal PLC, the world's largest producer of aluminum by volume, plans to reduce output by 300,000 tons, or 7%, in 2013 and permanently close 275,000 tons of capacity by the end of 2015.

Alcoa Inc. said last month it will spend 15 months reviewing possible curtailments totaling 460,000 tons, or 11% of current capacity, with a focus on its most expensive plants and those subject to the risk of rising energy or regulatory costs.

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