The smelter accounts for roughly one third of primary aluminium production in the United States.
It has been mulling closure for the recent few months due to high energy costs that have rendered operations financially unfeasible, sources told Fastmarkets.
The company told its employees that the smelter’s operations have been severely impaired by abnormally cold weather conditions, to the point they could not be restored while the plant was running.
“As you may know from various groups that have toured the plant, we have actively hunted for fresh capital from potential investors to support the long-term health of [Magnitude 7.] We will continue that journey and look for ways to restart the smelter in the future,” the notice read.
“This is horrible news for the US aluminium industry and specifically for the community,” a source told Fastmarkets.
The smelter employs around 450 workers. A Worker Adjustment and Retraining Notification (WARN) has not been filed with the Missouri Department of Labor, according to the department’s website.
The clean industry advocate group Industrious Labs, which has been advocating for clean and reliable energy for the US aluminium sector said in statement that “the curtailment plunged the nation’s aluminum supply into an even deeper crisis.”
It added that the US produced 30% of the world’s aluminium in 1980 and that the country remained the largest aluminium producer in the world until 2000, when its aluminum output accounted for 15% of the total global aluminium.
“[Now], the US is responsible for just one percent of global production,” Industrious Labs said. “Aluminum is a critical metal for everything from transmission lines to electric vehicles and solar panels, so the continuing decline of domestic aluminum production is emerging as a dire threat to the clean energy transition.”
The curtailment of Magnitude 7 leaves four primary aluminium smelters in the US: Alcoa’s smelters in Massena, New York and Warrick, Indiana, and Century Aluminum’s smelters in Mt Holly, South Carolina and Seebree, Kentucky.
The closure will tighten the supply of the light metal in the country, a US-based trader said.
“It will surely put sustained upward pressure on the premium,” the trader added.
Fastmarkets assessed the aluminium P1020A premium, ddp Midwest US at 18.5-19.25 cents per lb on Wednesday.
The premium was unchanged since Monday, but has increased by 2.72% from 18-18.75 cents per lb on January 1.
The premium has been supported by a wide contango on the light metal’s cash-to-three-month spread on the London Metal Exchange, while market participants have been reporting limited spot activity and sluggish spot demand.
To understand the complex market conditions influencing price volatility, download our monthly base metals price forecast, including the latest copper price forecasts today. Get a free sample.
