China's stranglehold on the global aluminium industry could be weakened by changes to export laws in Indonesia, according to American giant Alcoa.

Indonesia on Sunday enforced a long-awaited mineral export law that effectively bans unprocessed ores from leaving Indonesian shores.

The policy is designed to force companies to build processing plants and other downstream infrastructure on Indonesian soil, and pundits expect it to affect the trade of bauxite and nickel in particular, and possibly tin.

China imports close to a quarter of its bauxite - which is the initial raw ingredient in the production of aluminium - from Indonesia, and Alcoa chairman Klaus Kleinfeld said the ban could force China to curtail some of its refining and smelting capacity.

''China is nervous, and you can see that by their actions,'' he said, in reference to China's increased buying of bauxite over recent months.

The Chinese aluminium industry has built up more than nine months' worth of bauxite in stockpiles, and Mr Kleinfeld said that was a deliberate strategy in anticipation of the Indonesian ban. ''They are preparing for something to happen in their market,'' he said.

Australia has large reserves of bauxite in Western Australia, Queensland and the Northern Territory, and miners of the commodity - including BHP Billiton and Rio Tinto - could benefit if Indonesia limits its exports.

Some British analysts have speculated that the Indonesian ban is the biggest supply risk to face nickel and aluminium markets in recent years, while Macquarie analysts also highlighted it in recent research notes.

''In our view, alternative Pacific Basin suppliers will not be able to totally offset the drop in Indonesian exports,'' said Macquarie analysts.

China's mass production of aluminium has rendered Alcoa a break-even operation, despite its huge global portfolio.

Alcoa has two aluminium smelters in Australia but is expected to close one of them - Victoria's Point Henry smelter - within months due to its long-term lack of profitability.

Fairfax Media reported last week that Alcoa had not sought further government support beyond the current round of state and federal government assistance for the smelter, near Geelong.

Point Henry has a production capacity of 180,000 tonnes a year. Alcoa also operates the newer Portland smelter. This plant, which has a lower cost, produces about 358,000 tonnes of aluminium a year.

Former BHP boss Marius Kloppers was referring to China's influence on the aluminium industry when in 2012 he declared the sector to be structurally - rather than cyclically - challenged.

BHP has exposure to the final stage of the aluminium cycle through smelters in South Africa and Mozambique, while Rio Tinto also has a large exposure to the sector, including the ageing Bell Bay smelter in Tasmania.