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Alro to suspend alumina production in Romania for 17 months due to high energy prices

Alro to suspend alumina production in Romania for 17 months due to high energy prices

Romanian aluminum producer Alro said on July 21 it will temporarily close its Alum alumina plant in Tulcea due to high energy prices.

The company said the management’s proposal will be approved at the shareholders’ meeting to be held on July 29, 2022, to suspend Alum’s alumina production operations from August 1, 2022, for an expected period of 17 months.

It is understood that Alum is the only alumina plant in Romania with an annual capacity of 600,000 tons. Most of the alumina produced at this alumina plant is used by the Alro aluminum plant for production.

 

Gheorghe Dobra, Alto CEO and Chairman of Alum’s Board of Directors, said in a press release, “The energy crisis has escalated the economic crisis triggered by the epidemic, starting in 2021, due to the accelerated increase in electricity and natural gas prices, which negatively impact the production costs of calcined alumina and electrolytic aluminum. The cost of natural gas per ton of alumina is significantly higher than the actual price of a ton of alumina imported and delivered to Alro.”

Gas prices have increased tenfold, from €18 per MWh in the first quarter of 2021 to over €180 per MWh in the last quarter of 2022.

The price of electricity in the fourth quarter of 2022 exceeded the quoted price of €500 per MWh, compared to €60 per MWh in the first quarter of last year.

 

The price of CO2 emission certificates has increased from 25 euros per certificate at the end of 2020 to more than 90 euros per certificate at present.

The cost of alumina produced in Alum reaches more than $900 per tonne, while the price of alumina on the international market is around $500 per tonne. The share of energy products in the total cost of alumina is very high and will reach $500 per ton by 2022, he added.

Alro has reduced primary aluminum production by 60 percent by closing three electrolytic plants, and Alum has revised its production schedule based on the amount of alumina Alro needs, but the cost of alumina has reached unsustainable levels as prices continue to rise.

Tulcea will lay off about 500 employees, while the plant will retain a group of key specialists for R&D, alumina supply logistics, maintenance and repair work, and be ready for a quick restart and ramp-up of production when energy market conditions will improve.

Alum is the only calcined refinery in Romania.

 


Post time: Jul-25-2022