Alcoa (AA) stock fell about 2.7% in early trading after the aluminum company announced that it plans to cut its aluminum smelting capacity by about 12% by the middle of the year. But the cut isn’t likely to boost aluminum prices as the market still appears oversupplied, some industry-watchers are saying. Aluminum prices are down more than 27% from their 2011 peak.
�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 in a statement.
“The curtailments are expected to be complete by the first half of 2012. Alcoa�s alumina production will be reduced across the global refining system to reflect the final curtailments in smelting as well as prevailing market conditions. The curtailments will contribute to the Company�s long-term goal of lowering Alcoa�s position on the world aluminum production cost curve by 10 percentage points.”
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