Alcoa Inc, the world's biggest aluminum company, today said it will reduce global production capacity by 12 per cent, in order to reduce costs amid slumping aluminum prices.
The Pittsburgh, Pennsylvania-based company said that it intends to close or curtail approximately 531,000 metric tons, or 12 per cent of its global smelting capacity, to lower its position on the global aluminum cost curve and improve its competitiveness.
''These are difficult but necessary steps to improve Alcoa's competitiveness, preserve and grow shareholder value and protect jobs in the rest of the Alcoa system,'' said Alcoa chairman and CEO Klaus Kleinfeld.
The company will permanently close its smelter in Alcoa, Tennessee, which was curtailed in 2009, along with two of the six idled potlines at its Rockdale, Texas smelter. Together, these closures will reduce Alcoa's global smelting capacity of 4.5 million metric tons per year by 291,000 metric tons, or about 7 per cent.
The curtailments, to be announced in the near future, will reduce Alcoa's global smelting capacity by an additional 240,000 metric tons, or about 5 per cent.
Aluminum, which is used in a wide range of industries, including aerospace, motors, construction and packaging, has fallen more than 27 per cent from their peak in 2011.