Aluminum Producers Feel Squeeze of Low Prices, New Rules | Business | The Moscow Times:
"Leading global aluminum producers, including Russia's RusAl, are feeling the pinch of low metal prices in an oversupplied market and see little choice but to cut capacity, further eroding already thin margins.
Proposed rule changes for industrial metals warehousing could erode the profitability of financing deals that have locked up metals in London Metal Exchange (LME) depots, leaking metal onto an oversupplied market and putting pressure on prices.
"There is very little light at the end of the tunnel," Thomas Bradtke, partner and managing director of Boston Consulting Group Dubai, said at the Metal Bulletin aluminum conference in Geneva.
"There is not much in terms of margin generation capacity in this industry with a lot of fixed capex. There is a huge legacy of super expensive assets. It's a very challenging starting point. … It won't be solved from the demand side.""
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