Alcoa curtails 54,000 mt/year potline at Indiana aluminum smelter

Alcoa said July 1 that it will fully curtail one of three operational potlines at its Warrick aluminum smelting operations in Indiana by the end of day "due to operational challenges," taking 54,000 mt/year of production offline.

"Our teams will be focused on ensuring that we bring down this capacity safely while protecting production at the two other operating lines," Chief Operations Officer John Slaven said in a statement.

The Warrick smelter has been operating at 60% of its nameplate 269,000 mt/year aluminum capacity through three of its five total potlines. The current potline curtailment will bring the smelter's operating capacity down under 110,000 mt/year.

Warrick's operations supply aluminum to a nearby can sheet rolling facility at the site, which Alcoa previously owned and sold to Kaiser Aluminum in 2021.

The curtailment at Warrick is the second production cut announced for a US smelter in as many weeks.

Earlier in June, Chicago-based Century Aluminum said it would temporarily halt operations at its Hawesville, Kentucky, smelter for up to a year due to the rising cost of energy. The smelter was operating at 80% of its full 250,000 mt/year capacity at the time of the announcement.

The Hawesville curtailment mirrors actions taken by aluminum producers in Europe since late 2021 to curtail operations in response to surging energy prices, a situation that has only become more pronounced since Russia's invasion of Ukraine.

However, Alcoa owns and operates its own power plant that is co-located with Warrick and "generates substantially all of the power used by the Warrick smelting facility" using coal purchased from third parties at nearby coal reserves, according to the company's annual report. The company owns 657 MW of power generation at the plant.

Despite the curtailment in Indiana, the Pittsburgh-based aluminum producer this year has been able to commence a restart at its 447,000 mt/year Alumar smelter in Brazil and announce an investment to boost output at its 200,000 mt/year Mosjøen smelter in Norway by 14,000 mt/year with support from strong aluminum pricing and demand fundamentals.

The LME aluminum cash bid price closed at a record high of $3,983.50/mt in March before easing and settling at $2,396.50/mt at the end of June.

Likewise, the Platts spot 99.7% P1020 US Aluminum Transaction Premium in March and April reached a record 40.10 cents/lb plus LME cash, delivered Midwest, on net-30-day payment terms, according to data from S&P Global Commodity Insights. The assessment fell to 30.90 cents/lb at the end of June.