CHICAGO Alcoa Inc. plans to permanently close a potline with an annual capacity of 40,000 tonnes at its Massena East, N.Y., facility and temporarily curtail 124,000 tonnes per year of capacity at its smelters in Brazil in response to lower aluminum prices and premiums.
Aluminum prices, including premiums, have fallen to four-year lows, and we continue to operate in an uncertain, volatile market, Bob Wilt, president of Pittsburgh-based Alcoas global primary products division, said in a statement Aug. 14.
The most recent round of production cuts are part of a previously announced plan by the company to review 460,000 tonnes of smelting capacity, Wilt said. With the new cuts, Alcoa has announced closures or curtailments representing 269,000 tonnes per year, he said.
Alcoa has said it aims to cut up to 460,000 tonnes of smelter capacity over the next year in response to swooning aluminum tags (amm.com, May 1
). The company has already closed its previously idled 44,000-tonne-per-year smelter in Fusina, Italy, (amm.com, June 28
) and has also announced plans to permanently close two older potlines at its Baie-Comeau smelter in Quebec and postpone the construction of a new potline by three years (amm.com, May 16
Alcoa will have 646,800 tonnes per year of smelting capacity idle once the closures and curtailments at Massena East and in Brazil are complete, the company said. Restructuring charges related to the cutbacks at Massena East and in Brazil are expected to cost between $5 million and $10 million after tax in the third quarter of 2013, or 1 cent per share, Alcoa said.
The cash aluminum contract ended the London Metal Exchanges official session at $1,835 per tonne Aug. 14, up 6 percent from $1,731 per tonne Aug. 7 but off 13.6 percent from a 2013 high of $2,123 per tonne on Feb. 15.