Overcapacity in the aluminium industry is highly unlikely to be erased in the foreseeable future, according to the former head of Europe's largest aluminium producer, Norsk Hydro.
Svein Richard Brandtz??g, who was Norsk Hydro chief executive for a decade from 2009, said the market will eventually revert to a more balanced supply-demand picture but that this will take time to emerge.
"History shows that this [achieving production cuts] may be a dream. There have been times where there has been quite a good market balance but, in the situation like the one we see now, it will take some time and pain before there will adjustments in the aluminium industry," he told Fastmarkets during a webinar interview.
"That has been the history and I think it will happen again. There is a situation of very high risk of overcapacity for quite a while," he added.
One of the reasons why it is difficult to lower capacity at times of low prices and reduced demand is the cost associated with making short-term cuts, Brandtz??g said.
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