Century Aluminum announced in a company statement that it has secured a supply deal for alumina from a refinery in Louisiana. The fear of shortage of this most valuable input material for aluminium following the shutdown of Alunorte alumina refinery in Brazil compelled the company to get into this deal.
The news of Alunorte shutdown also caused Century shares tumble 12% yesterday.
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The Gramercy alumina refinery in Louisiana is one of the last alumina refineries in the U.S., owned by Noranda Alumina. The metal will be delivered during 2019-24 through London-based trader Concord Resources that has recently acquired an equity position in New Day Aluminium Holdings, the parent company of Noranda Bauxite and Alumina.
“The transaction demonstrates our confidence in the future of the US aluminium industry,” Michael Bless, chief executive of Century, said.
“As the last major smelter grade alumina refinery in the United States, we are intent on playing a major role in strengthening the American aluminium industry in the years to come,” David D’Addario, chief executive of Noranda Alumina, said.
Shortage of alumina is already raising costs for aluminium producers, as the supply was disrupted by 50% capacity cut in Hydro Alunorte, sanction against Rusal and the strikes in Alcoa’s west Australia refineries. Now the complete shutdown of Hydro refinery and upcoming alumina capacity cut in China during winter months will further raise the costs.
While aluminium market is grappling with the impact of tariffs on the metal imposed by US President Donald Trump, Alunorte closure turned out to be another blow in the supply side.
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