Chalco to close 380,000 tons of aluminum capacity

Chalco, China's top producer of aluminum, 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 Ltd said in a statement it would temporarily close 380,000 tons of annual capacity due to market conditions.

The shutdown represents 9 percent of its annual output of primary aluminum products of 4.22 million tons 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, 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 U.S. producer Alcoa Inc said last month it was closing two potlines with capacity of 105,000 tons as part of a review of 460,000 tons 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 tons of capacity.

Chalco’s brief statement said it had decided on a “flexible” production strategy, “which involves a temporary shutdown of production capacity of approximately 380,000 tons of aluminum”, which would take effect immediately.