Corp. expects aluminum prices to rise as it returns to full
capacity at its Hannibal, Ohio, smelter in the coming years,
according to details previously redacted from a business plan
filed with Ohio regulators.
The bankrupt Hannibal,
Ohio-based aluminum producer said in the plan that it expects
London Metal Exchange cash aluminum prices to average $2,300
per tonne ($1.04 per pound) in 2014 and $2,400 per tonne ($1.09
per pound) in 2015, according to documents filed Aug. 30 with
the Public Utilities Commission of Ohio.
third-party data, also contended that aluminum prices tend to
peak above $3,200 per tonne and to bottom below $2,000 per
tonne, with tags historically averaging $2,650 per tonne. The
plan also assumes a Midwest premium of 12 cents per pound with
a $70 per tonne (3.2 cents per pound) discount for off-grade
Ormet couldnt be
reached for comment Sept. 3 on whether some of the assumptions
in the business plan were still being used.
prices and premiums are below those in Ormets
The primary aluminum
cash contract ended the LMEs official session at $1,773
per tonne (80.4 cents per pound) Sept. 3, down 16.5 percent
from a 2013 high of $2,123 per tonne (96.3 cents per pound)
Feb. 15. AMMs Midwest premium currently stands
at 10.5 to 11 cents per pound.
Ormet expects to be
operating all six potlines at its Hannibal smelter by August
2014 at an annual run rate of 271,000 tonnes, and expects to
access power on the open market in 2014 and 2015. Wayzata,
Minn.-based Wayzata Investment Partners LLC also should be
delivering power to Ormet from a 540-megawatt dual-cycle
natural gas fired facility at a cost of $40 per megawatt hour
by 2016, according to the plan.
Ormet, which was sold
in June to Smelter Acquisition LLC, a subsidiary of Wayzata (
amm.com, June 4), filed for Chapter 11 bankruptcy
protection in February, citing high power and legacy costs (
amm.com, Feb. 26).
The company has said
it needs a better power deal to close the sale (
amm.com, Aug. 19).