The continuing weakness of aluminum prices this year has caused Rusal, the world’s biggest producer of the metal, to mull further production cuts this fall, the latest sign of a major shift in the balance of power between buyers and sellers.

Russia-based Rusal could cut its output of the industrial metal used in a range of products from cars to drinks cans by 200,000 tons in annualized terms starting this autumn, its Chief Executive Vladislav Soloviev said Friday. That is equivalent to nearly 6% of Rusal’s yearly production.

Rusal’s potential cut comes amid a prolonged malaise for aluminum caused in large part by a flood of exports of the metal from China as domestic demand there wanes. The price of benchmark 3-month aluminum futures on the London Metal Exchange has fallen 6.5% so far this year, and now trades close to its lowest level in a year.

China’s primary aluminum production rose 22% year-over-year to 2.7 million tons in May, accounting for around half of the world’s output. Elsewhere in the world, aluminum production grew by just 1.5% year-over-year, according to the International Aluminium Institute. China’s exports of unwrought aluminum rose by 32% to 2.1 million tons between January and May.

As supply has ballooned, the premiums buyers pay for immediate delivery of aluminum have collapsed to around a third of their previous level this year. In previous years, those premiums often reached very high levels, partly because of logjams at several metals warehouses around the world that slowed down transport of the metal.

High premiums had become such a problem that the LME has been planning to introduce new contracts this year to enable market participants to hedge themselves against spikes in the excess they have to pay for prompt delivery.

The decline in premiums is partly due to new rules introduced by the exchange to force warehouses with delivery backlogs that last longer than 50 days to ship the metal quicker.

With the market awash in supplies, Japanese premiums on aluminum—a key market—have fallen to a three-year low of around $100 per ton from $330 per ton in January. Even so, buyers there are demanding even lower premiums of $70-$75 per ton, analysts and traders say.

“If they agree to a premium of below $100 per ton, that would mark the lowest level in six years,” says Daniel Briesemann, analyst with Commerzbank. “We do expect the downward trend in premiums to continue further,” he said.

Japanese buyers are currently negotiating the premiums to be paid on aluminum that are fixed each quarter with major suppliers.

The aluminum price drop has put high-cost producers of the metal under pressure to prune their output. However, many big producers have been reluctant to reduce output for fear of losing market share.

Chinese producers in particular have resisted cuts. Their costs have fallen in part because of lower energy costs thanks to falling coal prices, and partly because the industry there has brought on stream a number of new, more energy-efficient smelters in recent months, meaning they can still make reasonable profit margins on their exports.

“We expect growing Chinese aluminum product exports to be a key feature of the aluminum market this year,” Citi said in a report.

Rusal’s Mr. Soloviev said the company had scrapped its forecast that the aluminum market could be in deficit this year, saying it now expects supply and demand to be roughly in balance. He said he expected other producers to follow Rusal’s lead in cutting production, though it was hard to read the intentions of its Chinese counterparts.

“The unknown question is China,” said Mr. Soloviev.