CHICAGO Rio 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.
Century Aluminum 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 said.
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).