China would, however, curtail almost 800,000 tonnes of capacity and the rest of the industry 155,000 tonnes, leaving China with a modest 105,000 tonne surplus of supply over demand but the rest of the world with a 1m tonne deficit.
The turnaround in the performance of Alcoa’s primary metals business, which produced a $US97 million profit in the second quarter compared to a $US32m loss a year earlier, has been driven by Alcoa’s own productivity measures but also an improvement in prices and in the industry’s supply/demand balance.
Alcoa’s cost-cutting, smelter closures and capacity reductions — which will include the closure of its Point Henry smelter near Geelong next month — have been echoed across the industry outside of China.
Since the financial crisis, Alcoa’s smelter closures have taken more than a million tonnes of metal out of the market, while reductions to the capacity of its continuing operations amount to about another 800,000 tonnes.
Read more here: Business Spectator