Century's Hawesville smelter is halting production as energy prices glide, Aluminium prices plunge

Century's Hawesville smelter is halting production as energy prices glide, Aluminium prices plunge

Century's Hawesville smelter is halting production as energy prices glide, Aluminium prices plunge

  • 28-Jun-2022 7:05 PM
  • Journalist: Timothy Greene

Houston: In the US market, metal prices rapidly fall as the central bank tightens monetary policy to combat inflation. The US Aluminium supply and demand have worsened, and prices have dropped roughly 37% in the last two months. The drop in the domestic demand and increased production activity of Aluminium amidst the rising inflationary pressure further exacerbated the market inquiries. However, the bearish macroeconomic factors and waning demand outlook further provoked quotation inquiries to drop.

The most significant primary Aluminium producer in the US market, Century Aluminium Company, has made massive rollbacks to its workforce, halting all operations for at least nine months in Hawesville, Kentucky, primarily due to the soaring energy prices. As per market participants, the Century's Hawesville smelter begins the idling process on Monday, June 27th. Additionally, the Company anticipates hampering the operation for approximately nine to twelve months until energy costs return to the normalized levels.

Hawesville's shutdown could raise the Midwest Aluminium premium prices and make the US Aluminium premium prices ever higher relative to other regions. As per US traders, Company's halted production activity could live the premium prices but not in the near term. However, premium prices depend on the market participants' stockpiles. Despite this, the smelter closure has also laid off roughly 630 employees, nearly 480 belonging to the United Steel Workers Union. Additionally, Century is still working with its employees and the local federation to help distinguish unemployment support and training opportunities.

As per Hawesville's administration, the unprecedented surge in the global energy prices due to the Russia-Ukraine conflict has dramatically soared the US and worldwide energy prices. The energy cost required to operate the Hawesville facility has more than tripled the historical average in a short time. Thus, it is necessary to temporarily curtail operations for at least nine months until energy costs return to normal. The Company anticipates that the energy prices will moderate next year and believes in Hawesville's smelter's prospects. Additionally, the Century continues exploring all available options to avoid the temporary curtailment.

As per ChemAnalyst, "The ongoing energy concern triggered by the war in Ukraine has provoked Century Aluminum to Shutdown the plant in Kentucky. The cessation of the Hawesville Aluminum smelter will further exacerbate the supply chain and impact the cumulative demand outlook in the US."


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