Alcoa (NYSE:AA)
To reduce the high energy costs for the facility, 2.6K/T of primary aluminum, or one-third of its production capacity, will be shut down at the Lista smelter in Norway. After announcing it would reduce one-third of the production capacity at its Lista smelter in Norway due to excessive energy costs for the facility, Alcoa (NYSE:AA) fell 5% in early trade on Tuesday.
Three potlines at the Lista smelter have a nameplate capacity of 94,000 metric tons annually. One potline, or roughly 31,000 metric tons, will be curtailed starting right away and should be finished in 14 days. The workers will stay on to finish the potline’s orderly shutdown and to be prepared for a restart.
The cost of spot energy is now above $600 per megawatt hour, and the facility is subject to it. Currently, the site is subject to spot energy prices, which have risen to above $600 per megawatt hour.
Targeting efficiency?
In Q4, the site’s energy status will improve after closing a favorable deal with power utility Statkraft that offers predictable energy costs for the rest of 2022. Presently, the Lista site is subject to spot energy prices, which have risen to more than $600/MWh.
Alcoa (AA) reported that 30% of its global smelting portfolio has either fixed price or self-generated pricing, 65% is powered by long-term energy contracts linked to the London Metal Exchange aluminum pricing, and the remaining 40% is exposed to short-term markets, which primarily cover consumption at the Lista smelter. Alcoa (AA) last month reduced one of its three active smelting lines at its Warrick Operations site in Indiana, citing “operational problems”.
Other troubles
As of August 22nd, Alcoa’s Mosjen smelter in Norway has been experiencing a strike as a result of a collective agreement between Industri Energi and Norsk Industri not being achieved by the predetermined deadline.
Featured Image: Megapixl @Mailos
Author Jowi Kwasu 
