Insight
Aluminium smelter cuts: who will blink first?
*Please note that this report only includes an Excel data file if this is indicated in "What's included" below
Report summary
Even before the coronavirus outbreak, aluminium companies were conducting asset reviews when the LME price was struggling to break through US$1,800/t. Despite the deteriorating price environment, ROW smelters maintained an upward output trajectory in Q4 2019. This was driven by restarts in Brazil and Canada coupled with an expansion in Bahrain. Despite low alumina prices, margins were getting crushed at US$1,700/t but smelters were not uncomfortably in the red to make difficult decisions to cut output. The rapidly falling aluminium price is now cutting deeper into the cost curve, forcing the industry to curtail production. In this insight, we look at the potential candidates for closures.
Table of contents
-
Executive summary
- Producer response so far – both voluntary and involuntary
- Cost curve under scrutiny
- Stalled supply response
- High-cost smelters will buckle under strain of low aluminium price
Tables and charts
This report includes the following images and tables:
- Aluminium cuts account for 1% of global output
- Smelters under review
- Percentage of production cash negative
- Factors influencing the decision to close smelters
What's included
This report contains:
