China Hongqiao Group, for example, plans to lift its capacity to 2.7Mt by the end of 2014 and claims to be securing new contracts before building new production lines.

While the Chinese government hopes to retire outdated capacity, CHG claims it relies upon state-of-the-art technology and that in 2013 it's production capacity will rise by 10%.

Other leading Chinese aluminium producers, such as Xinfa Group and Shanghai-based East Hope Group, are also standing firm and say they are not planning to cut capacity.

Russian aluminium giant UC Rusal has been very vocal about cutting capacity and so has the American light metal giant Alcoa. Even Chalco has said it would be suspending between 9-10% of its capacity, although one analyst claims that ongoing smelter projects that had already received the go-ahead, would not stop, meaning that any capacity cut-backs would not be immediate.

Last year, China's aluminium production capacity was 27Mt against consumption of 19Mt.

Global 'warehoused' aluminium is roughly double what Oleg Mukhamedshin, UC Rusal's deputy CEO, called the 'normal' level of 6-7Mt.

Source: Bloomberg.