When do you invest in alumina refinery cost reduction?

Aluminium price, like many commodities, is cyclical in nature due to the delay between investment decisions and additional capacity.  This results in oscillations between oversupply and excessive demand. Behind these cycles, however, there is a relentless reduction in real aluminium price over the long term (refer figure 1). This is to be expected in a highly competitive commodity environment.  Over time, improvements in technology and operational practices drive efficiency that can lower production costs.  This trend places pressure on all operators to continuously improve in order to maintain profitability and the long term viability of their asset.