Rio under market pressure to cut aluminium production
AUSTRALIA'S high-cost aluminium production is in the firing line amid sliding prices, with global giant Alcoa confirming its Victorian smelters are prime targets for capacity closures and Rio Tinto being urged to cut production from local assets.
Alcoa, which kicked off the US reporting season with a second-quarter net loss of $130m this week, said it was committed to closing high-cost production as part of a review of 460,000 tonnes, or 11 per cent, of annual capacity.
Rio's big aluminium unit, which was acquired in the $US40 billion acquisition of Alcan in 2007, is also coming under pressure to cut production as prospects for asset sales dwindle.
Credit Suisse said Rio should be next after Alcoa's review, which followed an earlier shutdown of more than 500,000 tonnes of annual capacity and a March decision by Russia's Rusal to shut in 300,000 tonnes of capacity.
Analyst James Gurry said Rio was looking at a loss of more than $US500m from Pacific Aluminium unit this year.
Read the full story at The Australian.