Alcoa will cut alumina production by up to 15% at San Ciprián on high gas prices

Alcoa will reduce production at its San Ciprián alumina plant in Spain because of high natural gas prices, it said late last week.

The producer will “reduce production by no more than 15% [at San Ciprián] to mitigate the impact of high natural gas prices in Spain,” it said before the weekend, a company representative confirmed to Fastmarkets on Tuesday, July 5.

The refinery has alumina capacity of 1.5 million tonnes per year.

“The adjustment will have no impact on customer agreements, employment levels at the plant, or any planned maintenance or investments,” the representative said. “The refinery can easily adjust its output, which it has done on other occasions for either operational or market-based reasons.”

Energy prices in Europe and globally have continued to rise in recent weeks, putting pressure on alumina refineries and aluminium smelters, with many market participants expecting further production cuts.

Alcoa suspended all aluminium production at the smelter at San Ciprián for two years from January, citing challenges from “exorbitant energy prices.” The casthouse and alumina refinery will continue to operate normally, it had said at the time

In recent days, the alumina market has been considering the impact on the Atlantic differential - most recently at a premium of $41.25 per dry tonne - of the recently announced closure of Century Aluminium’s Hawesville smelter in the United States.

The alumina market had not yet reacted to the news of the San Ciprián output cut, with Fastmarkets calculating its benchmark alumina index, fob Australia at $358.21 per tonne on July 4.

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