Price dips may cut aluminum output

SINGAPORE - Chinese aluminum producers may cut output from a record if the current price slump persists and after the world's third-largest economy signaled an end to its currency's fixed rate to the dollar.

China, the world's largest maker of the metal, produced 1.416 million metric tons in May, the highest monthly total ever, said China International Futures (Shanghai) Co analyst Wang Zhouyi, as higher power costs were offset by falling prices of alumina, the raw material used to make aluminum.

Aluminum prices in Shanghai have tumbled 15 percent this year, while London Metal Exchange prices dropped 12 percent, on concern that Europe's debt crisis will slow the global recovery and China's curbs on lending will cool demand. The average cost of aluminum production in China is 15,300 yuan ($2,247) a ton, according to CRU International Ltd. That compares with Tuesday's Shanghai Futures Exchange price of 14,845 yuan a ton.