Alcoa says it is taking “decisive action” to curtail uncompetitive smelting and refining capacity to ensure continued competitiveness in current market conditions.

The company will reduce aluminium smelting capacity by 503,000 metric tons and alumina refining capacity by 1.2m metric tons.

Alcoa will start the cuts in an unspecified time during the fourth quarter of 2015 and will complete them by the end of the first quarter next year.

The reductions aim to improve the cost position of the upstream business and ensure competitiveness in a lower pricing environment, including a 30% drop in the Midwest transaction aluminium price year-to-date.

Alcoa will have closed, divested or curtailed 45% percent of total smelting operating capacity since 2007.

“Alcoa has consistently taken decisive actions to create a commodity business positioned to succeed throughout the cycle,” said Alcoa chairman and CEO, Klaus Kleinfeld.

“We have closed or curtailed unprofitable capacity, re-powered key assets at lower energy prices, built-up a profitable value-add casthouse network, established the foundation for a strong commercial bauxite business, and made substantial productivity improvements.

“In the face of continued adverse market forces, we are once again not standing still.

“These difficult, but necessary measures will further strengthen our Upstream portfolio, reducing our cost position and driving greater resilience as we prepare to launch this business as a strong stand-alone company in the second half of 2016.”