Alumina Shares Fall as Alcoa Closes 12pc of Smelting Capacity

Submitted by Share Market Writer on 6 January, 2012 - 14:24

Shares of Alumina (AWC) declined this morning more by more than 3 per cent after US aluminium producer Alcoa Inc. (AAI) announced that it would permanently shut down 12 per cent of its aluminum smelting capacity due to weakened prices of industrial metal. Alumina currently owns 40 per cent stake of the US aluminium producer.

Alcoa reported that it would cut off 531,000 metric tonnes or 12 per cent of its smelting capacity as it would permanently close its smelters in Tennessee and Rockdale, Texas, and added that it would announce additional curtailments in the near future. The company added that aluminium prices have declined by more than 27 per cent from its height in 2011.

"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.

Alcoa's shares fell by 1.4 per cent at $9.23 in the after-hours trade, losing 43 per cent of its value last year.