As the global industry braces itself for more market surpluses and Chinese aluminium giant Chalco posts a HK$10 billion loss – based on depressed prices – aluminium is now the weakest performing metal on the LME and has been heading in that direction for the last four years.The exact amount of 2013 cut-backs in China is disputed: some say 500kt and others say 700kt (mainly by small-to-medium-sized companies). In many ways it’s academic as China adds 4Mt of new capacity and, in some instances, keeps older, less profitable operations running to stave off worries about unemployment and the cost of shutdowns, it is argued.

The bottom line is that China’s capacity is rising higher than demand and no agreement has yet been reached between the global industry and the Chinese after representatives from both sides met to discuss the problem.

In efforts to reduce the environmental impact of aluminium smelting, the Chinese are planning to publish a list of smelters that meet with environmental standards and offer cost-cutting assistance to those on the list. Those not on the list, it is argued, will have to cut output to remain competitive.

How China's stance affects the global industry is hard to say other than it will mean more market surpluses in the years to come.

Analysts say that the American industry is better placed than Europe, thanks to less pressure because of shale gas. European smelters, however, are more vulnerable, it is argued.