Singapore 21/12/2016 -
Alcoa’s Portland aluminium smelter in Australia is running at less than 30% of its production capacity since a power outage curtailed its output at the start of this month, the company announced on Wednesday December 21.
Alcoa previously stated that production on one of its potlines had been halted, with a portion of another potline running but did not mention its operating rate.
Power was lost to both of the smelter’s potlines for around five-and-a-half hours when a fault occurred on a transmission network in the Australian state of Victoria on December 1, and the company has since been forced to run below capacity.
Alcoa’s ceo Roy Harvey had met with Australia’s minister for industry, innovation and science, Greg Hunt, and Victoria minister for industry and employment, Wade Noonan, in New York to discuss the Portland smelter, Alcoa said.
Harvey had expressed appreciation for the assistance offered by the Australian government to restart the smelter’s lost production and said the offers would be carefully reviewed, Alcoa added without detailing the offers.
The outage at the smelter is occurring as talks between aluminium producers and Japanese buyers are under way for first quarter term contracts.
Market participants are anticipating higher first-quarter premiums - possibly in the range of $90-95 per tonne cif MJP (main Japanese ports) - up from the current quarter’s premium of $75 per tonne.
Other than the Portland smelter outage, there is upside pressure from higher US Midwest and European aluminium premiums, and concerns over future supply, market observers said.
The Portland smelter has a production capacity of 358,000 tpy and is a joint venture between Alcoa of Australia Limited (55%), CITIC (22.5%), and Marubeni Aluminium Australia (22.5%).
(Editing by Kyle Docherty)