China’s Chalco to close 380,000 tonnes of aluminium capacity

Chalco, China’s top producer of aluminium, joined other companies on Wednesday in cutting capacity to help trim a market surplus after it suffered losses due to weak prices.

The Aluminum Corp of China said in a statement it would temporarily close 380,000 tonnes of annual capacity due to market conditions.

The shutdown represents 9 per cent of its annual output of primary aluminium products of 4.22 million tonnes last year, according to the firm’s annual report on its website.

In March, Chalco posted worse than expected net annual loss of 8.2 billion yuan (HK$10.2 billion), hit by low aluminium prices and rising costs.

Global production of the lightweight metal used in packaging and transport has consistently swamped demand, leading to a build up of inventories and hitting prices.

Chalco’s move came after US producer Alcoa said last month it was closing two potlines with capacity of 105,000 tonnes as part of a review of 460,000 tonnes of operating capacity.

Russia’s RUSAL, the world’s largest producer of aluminium, said last month it could consider deeper capacity cuts after last year promising to slash 300,000 tonnes of capacity.