“Strategery” is back! This time in the US aluminum industry…
Via Charleston Regional Business Journal: “Alcoa Mt. Holly [in South Carolina] and Santee Cooper face a June 30 deadline for negotiations over Alcoa’s power rate. The current contract expires in 2015, and the two sides find themselves in a position similar to last year, when Alcoa Mt. Holly dodged corporate smelting cutbacks in the midst of contract negotiations that led to the one-year extension.”
Reporter Matt Tomsic quotes Chris Ayers, president of Alcoa’s Global Primary Products as saying, “Because of persistent weakness in global aluminum prices, we need to review every option to maintain Alcoa’s competitiveness…any action taken will only be done after a thorough strategic review and consultations with stakeholders.”
According to the article, “Alcoa announced the 15-month review in early May, saying the company is examining about 11% of its smelting capacity and may need to reduce that capacity since aluminum prices have fallen more than 33% since their peak in 2011, when cash buyers were paying nearly $2,800 per ton.”
Current Aluminum Prices
After a couple of days of decreasing prices on the LME, the primary aluminum cash price held steady at $1,814. The 3-month price of aluminum steadied at $1,847 per metric ton following two-days of dropping prices on the LME.
Chinese aluminum prices closed flat for the day. The price of Chinese aluminum scrap showed little movement on Tuesday. The cash price of Chinese aluminum fell 0.1 percent, marking the fifth in a row of declining prices. The drop-off has accelerated since Wednesday, May 22. The price of Chinese aluminum billet remained steady. The price of Chinese aluminum bar held steady.