Vimetco makes further cut in China aluminium output

Dutch aluminium producer Vimetco (VICOq.L) said on Wednesday it cut production again at its Chinese operations and continues to delay capital expenditure on new projects there because of worsening market conditions.

The further 50,000 tonnes per year (tpy) reduction from January means the company's Chinese facilities are now operating at 360,000 tpy out of a potential 660,000 tpy.

"As a result of our production cuts we are now working at approximately 60 percent of our total capacity...," acting Chief Executive Officer Pierre Baillot said in a statement.

The company would continue to monitor the market and would be ready to act in a timely manner if conditions continued to deteriorate, he added.

Global aluminium prices have dropped sharply since last July's historic peak of $3,380 a tonne, hit by sharp falls in demand from the key transport and construction sectors.

The London Metal Exchange (LME) three-months price MAL3 was last indicated at $1,314/24 a tonne.

Vimetco said the cost reduction programme continued at its majority-owned Alro Slatina (ALRO.BX) operations in Romania, cutting production there by 65,000 tonnes this year.

Vimetco also said it was continuing a rigorous plan to cut production costs at the plant in south-western Romania, which produced 288,000 tonnes last year.

The company said the workforce at Alro had been cut to 3,392 by the end of 2008, almost 1,000 down on a year earlier.

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