By March this year, the LME cash price for aluminium had fallen to $1,300/t – a 60% plunge from its peak around $3,300/t just eight months earlier. That painfully low price was below some smelters’ costs of production, so many aluminium producers had to cut output to avoid losses. Nevertheless, stocks of the metal have reached a record high, as demand struggles to catch up with supply. Analysts expect aluminium production to fall to 36.2m tonnes in 2009, a 7.7% drop from 39.3m tonnes last year. According to International Aluminium Institute (IAI) data, primary aluminium production (excluding China) increased to 25.6m tonnes in 2008. In the first half of 2009, 11.7m tonnes were produced – around 1m tonnes less than in the same period last year (see table). But if production in China and Korea is added, world total output for 2008 was about 40m tonnes. Prices have started to recover. By...