Alcoa Corp. plans to suspend primary aluminum production at its Spanish plant, Europe’s second-largest, for two years because of soaring energy prices in Europe.
Last week, energy costs soared to a record high, putting the heavy industry under increasing financial pressure. Europe’s largest aluminum smelter, Aluminium Dunkerque Industries France, already cut production earlier this month.
Voerde (95,000 tons per year) and Hamburg (130,000 tons per year), two of Germany’s three aluminum smelters owned by Trimet Aluminium, have also reduced capacity, with an expected reduction in output of nearly 30 percent, involving about 70,000 tons of annual capacity.
An Alcoa spokeswoman said the company welcomes the fact that a majority of workers at the Spanish plant voted in favor of the proposed shutdown until the end of 2023. She noted that the plan offers a viable future opportunity for the troubled plant. Alcoa has been trying to shut down the operation for years, calling the smelter “uncompetitive.
The smelter will continue to supply strategic customers in the pharmaceutical and food industries with remelted aluminum, while producing 65,000 tons of billet and more than 25,000 tons of sheet aluminum annually. Alcoa agreed to continue to pay workers and not lay off employees during the shutdown.
While aluminum prices have risen more than 40 percent so far this year, greater increases in electricity prices are eroding the profitability of aluminum production.
“This is not surprising given European power prices.” Duncan Hobbs, metals analyst at Concord Resources in London, said. “It’s clear that producing aluminum is unprofitable at current spot electricity prices.”
Alcoa also said it will invest $103 million to improve the viability of its Spanish plant, including the cost of restarting electrolytic cells to resume primary aluminum production within two years. Aluminum smelters are typically slow to change capacity because of the high cost of closing and restarting capacity.
Alcoa recently signed a pre-agreement with Spanish forestry and energy group (Greenalia SA) for the latter to provide green energy for its Spanish plants for 10 years, starting in 2024.
From:https://www.ccmn.cn/news
Post time: Dec-30-2021