Alcoa
announced that it will review 460000 metric tons of smelting capacity
over the next 15 months for possible curtailment to maintain the
Company's competitiveness, as aluminum prices have fallen more than 33
percent since their peak in 2011.
The review will include
facilities across the Alcoa system and will focus on higher-cost plants
and plants that have long-term risk due to factors such as energy costs
or regulatory uncertainty. The possible curtailments could affect 11
percent of Alcoa's global smelting capacity. Currently, the Company has
13 percent, or 568,000 metric tons of smelting capacity idle.
“Because
of persistent weakness in global aluminum prices, we need to review
every option to maintain Alcoa's competitiveness,” said Chris Ayers,
President of Alcoa's Global Primary Products. “Any action taken will
only be done after a thorough strategic review and consultations with
stakeholders.”
When reviewing smelting capacity for possible
curtailment, Alcoa will consider a wide variety of alternative actions,
ranging from discontinuing pot relining to full plant curtailments
and/or permanent shutdowns. Alcoa's alumina refining system will also be
reviewed to reflect any curtailments in smelting as well as prevailing
market conditions.
Alcoa's review of its primary metals operations
is consistent with the Company's 2015 goal of lowering its position on
the world aluminum production cost curve by 10 percentage points and the
alumina cost curve by 7 percentage points. Decisions on curtailments
and/or closures will be announced as reviews are completed.
Source by Commodity Insights
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