Tinto Alcan Inc. and Century Aluminum Co. continue to negotiate
who will handle commercial arrangements for product from
Centurys Sebree, Ky., facility in 2014 as annual billet
contract talks get under way.
"No decision has yet
been made on 2014 and beyond," a spokesman for Chicago-based
Century said in an e-mail to AMM.
acquired the Sebree facility from Montreal-based Rio Tinto
Alcan in June (
amm.com, June 3), with the two parties agreeing
that Rio Tinto would continue to sell product from Sebree for
the balance of 2013.
Rio Tinto Alcan would
like to continue to sell billet and ingot from Sebree in 2014
and beyond (
amm.com, May 10), but Baar, Switzerland-based
Glencore Xstrata Plc, Centurys largest shareholder, could
replace Rio Tinto as the company designated to handle
commercial agreements for Sebree, market sources said.
Rio Tinto Alcan and
Glencore Xstrata did not respond to requests for comment.
Some market sources
said Rio Tinto Alcan was in the best position to sell
Sebrees output, given that it developed some of the
products made at the plant, such as corrosion-resistant
heat-exchanger products. Century may now own the intellectual
property for such applications, but Rio Tinto Alcan has
technical expertise and an experienced sales team
well-positioned to sell them, they said.
But Glencore Xstrata,
while perhaps lacking Rio Tinto Alcans in-depth
knowledge, also could support sales from Sebree, they said.
With negotiations for
2014 annual billet contracts ramping up, the matter of who will
handle sales of Sebree product next year has taken on added
urgency, market sources said. Rio Tinto Alcan and Century are
scheduled to meet this week to discuss the issue, they
Some sources said
consumers may be skittish about placing orders with Sebree,
given uncertainty not only about which company theyll be
dealing with in 2014 but also because of questions about
whether the facility will be in operation once its current
power deal expires in January.
But sources were quick
to note that the power-supply issue is much less of a concern
now than a week ago thanks to Century receiving state approval
for a free-market power-supply deal for its smelter in
Hawesville, Ky. The company has said it is seeking a similar
arrangement for Sebree (
amm.com, Aug. 14).
The two smelters
account for an estimated 70 percent of Henderson, Ky.-based Big
Rivers Electric Corp.s output (
amm.com, Feb. 8).