By Andrea Hotter Of DOW JONES NEWSWIRES U.S. aluminum producer Alcoa Inc. (AA) is to cut a further 350,000 metric tons of annual capacity from its global smelters, including at Ferndale, Wash. and Baie Comeau in Quebec, the company said Monday. This takes the total amount cut from Alcoa's smelters to 615,000 tons a year, or 15% of its annualized output, with 265,000 tons already curtailed at its Rockdale smelter in Texas.
The move comes amid falling demand, a surplus of aluminum metal and a dramatic decline in market prices, which peaked in July at $3,380 a ton but have since fallen below $2,000 a ton on the London Metal Exchange. A cut in production of alumina, the key ingredient in the production of aluminum, will be made, the company added. Recently the company reduced output at its Point Comfort alumina refinery.
"These curtailment steps are part of a larger global effort to reduce our costs, match production with demand, and help secure a long-term future for our operations in light of the current market," said Bernt Reitan, Alcoa executive vice president and president of Global Primary Products.
The company said that by making reductions in this way, it will minimize the costs associated with wholesale plant shutdowns and re-starts, as well as the impact on plant communities. The reductions will be achieved through partial potline curtailments, targeted suspension of pot re-lining, optimization of pot operating parameters, and by modulating power use for sale during peaks in the power markets, Alcoa said.
The Baie Comeau curtailment will be implemented as part of the previously announced modernization program at the plant; while at Ferndale, Alcoa continues to make progress on finalizing a deal with the local power supplier to supply energy through 2008.
"The industry is in surplus and has experienced an unprecedented fall in aluminum prices over a very short period of time," said Reitan. "While we continue to see a strong long-term outlook for aluminum consumption, we are taking a series of actions to address the current market conditions, including targeted cost-reductions across our system and reducing production," he added.
The reductions will be phased-in beginning immediately. Alcoa's new annualized smelting production rate is approximately 3.5 million tons a year, with approximately 1.0 million tons of annual production capacity idled. Costs for the curtailments are still being finalized, Alcoa said.
Shares of Alcoa closed Monday up 5.3% to $11.78.
-By Andrea Hotter, Dow Jones Newswires; 44-207-842-9413; andrea.hotter@dowjones.com
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(END) Dow Jones Newswires
November 10, 2008 16:31 ET (21:31 GMT)

Publié le 10 novembre 2008 Copyright © 2008 Dowjones