Chinese aluminium smelters will be forced to reduce production levels because they cannot continue to operate with such low global market prices, according to the world's largest aluminium producer.

Chinese smelters "expected the price to recover but it's already [been] more than six months. The price is very low and these producers are suffering from losses, so they have to start shutting down," said Oleg Mukhamedshin, deputy chief executive of United Rusal Co., in an interview this week.

Chinese producers of aluminium have been criticised for pumping out vast quantities of the metal even though prices have plunged 6 per cent since the beginning of the year, and have been hovering near six-year lows in recent weeks. Critics such as Rusal say a range of government subsidies keep unprofitable Chinese producers afloat, even as smelters in the West are cutting back.

"The issue is that we still can see that certain production in China is subsidised," he said. "That's why we think 50 per cent of Chinese producers are still loss-making."

Mr Mukhamedshin said the prices seem to have reached a bottom, and he expects all-in prices to get back to around $US1,950 or $US2,000 ($A2,555 or $A2,621) a metric tonne by the fourth quarter. The current all-in price is between $US1,800 to $US1,850 a tonne.

Furthermore, demand is "very strong and growing by 6.5 per cent to 7 per cent every year," he said, so Rusal is also expecting an aluminium deficit in 2016 and 2017.

But aluminium producers in the West want a sustained deficit to lift prices back to more profitable levels, which won't come unless China reduces production.

Earlier this week, Alcoa, a heavyweight producer in the aluminium industry, permanently closed its Pocos de Caldas smelter in Brazil, at a loss of 96,000 metric tonnes. The firm blamed "market conditions" and said the Pocos smelter was high-cost.

Last month, the trade body European Aluminium said Chinese exports were damaging to European producers.

"Chinese exports of aluminium products to Europe have increased by almost 30 per cent since the beginning of 2015, posing an unprecedented threat to the European aluminium industry," it said in a press release.

Problems with the build-up of aluminium stocks in warehouses authorised by the London Metal Exchange are also starting to subside, and companies are getting hold of more metal. That adds to the downward pressure on prices. Since the beginning of the year, stocks held at warehouses authorised by the LME have declined by about 15 per cent, to 3.56 million metric tonnes.

Chinese smelters may face additional pressure as the Chinese government seeks to clamp down on heavy polluters, including coal-fired plants and aluminium smelters, he said.

Rusal itself is still considering shutting another 200,000 tonnes of production and "will make a decision this year," he said.

Analysts say aluminium prices aren't going to recover soon until China takes action.

"Unless the Chinese government changes [something]...this will probably continue," said Daniel Briesemann, a metals analyst at Commerzbank. "[But] I think at some point the pain will be too big, it will be too painful to continue operating."