China cuts 2008 aluminium output forecast

China's top metals industry body cut its forecast for aluminium production this year by 6.5 percent as it expects smelters to stick to a plan to cut output because of power shortages, a senior official said on Friday.

Despite analysts' doubts that the 20 producers who pledged to cut output by up to 10 percent will maintain those curbs amid record high prices, that companies would toe the line far longer than they did in late 2005, when a similar pact fell apart within a month of the deal.

The world's top aluminium producer will produce only 14.5 million tonnes of aluminium this year, 1 million tonnes less than first expected, Wen, the vice president of the state-controlled China Nonferrous Metals Industry Association, said.

Some 500,000 tonnes of the cut is due to a surprise deal announced on Tuesday for the top 20 producers, representing 70 percent of output, who will cut output to help ease the country's worst power supply crisis in years, sending prices of the metal to a record high of $3,380 a tonne.

Wen said the other 500,000 tonnes of lost output was due to January's severe cold spell and heavy snows, which had damaged power networks in some provinces.

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