Exorbitant energy prices cause 20% primary aluminium production cut at Talum

Talum, the major Slovenian company specializing in alumina and aluminium products, has reduced its primary aluminium production by 20 per cent of its smelting capacity due to exorbitant energy prices. Power prices in Europe have been rising since the beginning of 2021, making some production sites unviable due to the high energy requirements of aluminium smelting.

Reduced production can result in more significant deficits and higher costs for European customers purchasing aluminium for building, packaging, and transportation use. However, this year's predicted recession in Europe will reduce demand, and Chinese smelters have increased production to make up for European losses.

Reports suggest that Talum had already curtailed output by 50 per cent while having the capacity to generate 84,000 tonnes of primary aluminium annually. According to a Talum spokesperson, the firm feeds scrap aluminium into its melting furnaces, which results in the factory manufacturing about 110,000 tonnes of aluminium products annually. They claimed that since aluminium is required for green technology, the scenario of forcing European industry to shut down is "absurd."

According to figures from the International Aluminium Institute (IAI) and Macquarie, Europe generated a little over 4 million tonnes of the 67 million tonnes of aluminium produced globally last year, excluding Russia.

Around 1 million tonnes of European capacity has been taken offline since 2021, and another 500,000 tonnes are under threat, say analysts. The latest was Norsk Hydro NHY.OL said it would halt all operations at a 175,000 tonne per year smelter in Slovakia by the end of September.