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Global Aluminum Smelting Overcapacity Continues to Persist
Edited by : AL CIRCLE
1 min read
Global aluminum smelting overcapacity will continue to persist over the next two to three years despite increasing pressure from higher costs, Tony Rizzuto, managing director and head of metals and mining research at Dahlman Rose & Co., said at the American Metal Market Aluminum Summit.
"It's going to be a challenging environment for smelters unless they are on the lower end of that cost curve," he said, adding that a focus on low cost electricity and bauxite supply will be critical for primary smelting operations.
Aluminum production costs will continue to rise, pressuring these supply additions.
"China is going to feel some more of these pressures" as the cost of labor rises at the same time as the Chinese yuan appreciates against other currencies, Mr. Rizzuto said.
About half of the world's aluminum production is operating at a loss, he said.
"It's going to be a challenging environment for smelters unless they are on the lower end of that cost curve," he said, adding that a focus on low cost electricity and bauxite supply will be critical for primary smelting operations.
Aluminum production costs will continue to rise, pressuring these supply additions.
"China is going to feel some more of these pressures" as the cost of labor rises at the same time as the Chinese yuan appreciates against other currencies, Mr. Rizzuto said.
About half of the world's aluminum production is operating at a loss, he said.
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