Asahan mulls more production cuts

Asahan mulls more production cuts

SINGAPORE (Reuters): PT Indonesia Asahan Aluminum is considering further cuts in output as a result of falling water levels in the lake that generates power for the plant in north Sumatra, sources close to the company said.

"We're studying the feasibility of a production decrease or some other protection arrangement, but we have not decided yet," said one source by telephone from Jakarta.

"We are internally studying the situation."

The smelter has already announced one output cut - to 175,000 tonnes in the 1998/99 (April/March) year, which compares with an annual capacity of 220,000 tons.

Output in 1997/98 is estimated at 216,150 tons.

In normal market conditions, around 60 percent of the output goes to Japan and the other 40 percent to Indonesia.

The alumina comes mostly from Australia.

But this year local consumption in Indonesia has fallen by up to 60 percent, according to trade estimates, so some of the aluminum will have found a home elsewhere.