Aluminum producer Noranda Aluminum Holding Corp. (NYSE: NOR) announced Thursday morning that it has hired Morgan Stanley as an advisor to the company as it “evaluates a variety of strategic alternatives.” The company also said it would suspend its $0.01 per share quarterly dividend and seek shareholder approval for a reverse stock split at an as-yet undetermined ratio.

Noranda has seen its share price collapse by nearly 70% in the past 12 months, far more than the declines in other aluminum producers. Century Aluminum Co. (NASDAQ: CENX) shares are down nearly 30%, while Alcoa Inc. (NYSE: AA) shares have lost about 18%. Only Kaiser Aluminum Corp. (NASDAQ: KALU) has managed to post a gain — shares are up about 19% — and that is due to its role as a maker of specialty products.

The miners are all struggling with falling prices for the commodity, and the blame, at least this month, is being assigned to continuing high export levels from China. Other factors affecting the price are weak demand and abundant supply from Noranda, Alcoa and the rest. Even Rusal, the Russian aluminum colossus, is feeling the effect of Chinese exports.

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Metals market analysts at Metal Market noted recently, “In the absence of demand from the financial sector, both the LME/CME price and physical delivery premiums have been falling, particularly in Asia.” When demand from exchange traded funds and hedge funds was high in early 2011, aluminum fetched about $1.25 a pound, compared with a closing price of $0.75 a pound at the close of trading on June 16.

Demand for aluminum from the auto industry as it builds and sells new vehicles at a very strong pace has failed to raise demand (and prices) for aluminum or, for that matter, steel. Demand from the airplane builders is slower to develop because it takes so long to increase production on more planes, and the huge backlogs at Boeing and Airbus are having little impact on the market for aluminum.

What can Noranda do? One alternative is to put itself up for auction. Unfortunately there are a limited number of potential buyers because alumina and bauxite are not exactly scarce these days. A merger with a midsize company like Century might be an option, but Alcoa is unlikely to come knocking.

Shares of Noranda traded down about 13.8% Thursday morning to $1.06. The stock’s 52-week range is $0.94 to $5.64. It appears that investors do not see the light at the end of the strategic review tunnel either.

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