Aluminium smelter cutbacks: kicking the can further down the road

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Report summary

The LME aluminium price continued its descent in August 2015 falling to a multi-year low of $1485/t mainly due to weaker demand growth expectations and relentless oversupply in China. The rapidly falling all-in-price is now cutting deeper into the cost curve forcing the industry to curtail production. Our analysis suggests that apart from the 1.2Mt curtailments from Chinese smelters in the top quartile in 2015, another 4.3Mt of Chinese production is vulnerable to temporary closures.

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    Aluminium smelter cutbacks: kicking the can further down the road

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Table of contents

  • Executive Summary
  • Cost curve under scrutiny
  • Boom and bust
  • Producer response so far in 2015
  • China versus China
  • What's different now versus the GFC
  • Conclusion

Tables and charts

This report includes 8 images and tables including:


  • Global 2015 C1 cash + sustaining capex cost curve and the all-in price
  • 2008 C1 Cost Curves highlighting average November – December 2008 aluminium cash prices
  • China shows higher proportion of output in the highest cost quartile
  • Aluminium smelter cutbacks: kicking the can further down the road: Image 4
  • 14.1Mt high cost production
  • Chinese semis exports
  • Primary smelting C1 cost and prices


  • Production changes for select provinces since July 2015 (kt)

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