Reuters Summit-Alcoa sees China as linchpin in aluminum market
China has been the linchpin in the global aluminum industry with its sizable production cuts and measures to boost industrial demand, steps that have brought the global market into balance despite a rapid decline in the metal price, Alcoa Inc (nyse: AA - news - people )’s CEO said Tuesday.Speaking to Reuters Global Mining and Steel Summit, CEO Klaus Kleinfeld credited China’s massive smelter production cuts of over 20 percent, which turned China into a net importer of the shiny metal, as helping to bring the global aluminum market roughly into balance.He added, however, that the market outside of China is still running a supply overhang of more than a million tonnes, which, if it continues, could pressure Alcoa to cut more capacity at its U.S. smelters, its highest-cost producers.Alcoa has a list of variables to consider before making such a move, including the smelter’s cost-curve position and terms of its power contracts."So the pressure is still on. We’ll continue to look at our situation and then decide what to do about it. But it’s possible," the CEO said of additional U.S. capacity cuts.With benchmark aluminum prices on the London Metal Exchange sliding from a record high of $3,375 a tonne last July to around $1,300 a tonne currently, the aluminum giant has had to manage its cash position, trimming costs wherever possible.