July 28 (Reuters) - Century Aluminum said it will shut its Ravenswood smelter in West Virginia immediately as it had failed to secure competitive power supply amid tough market conditions.
Aluminium producers are seeing their profits dwindle due to sinking prices of the metal, which are currently near six-year lows. Premiums, a surcharge received by producers for delivery of metal, have also more than halved this year.
The Ravenswood smelter has been idled since February 2009.
“The decision to permanently close the Ravenswood plant is based on the inability to secure a competitive power contract for the smelter, compounded by challenging aluminum market conditions largely driven by increased exports of aluminum from China,” Century said in a statement late on Monday.
“As a result, the economics of restarting and operating the facility are unfavorable,” it added. Century is controlled by Swiss commodities trade house Glencore.
The combined impact of stronger output and a sharper-than-expected slowdown in top producer China has sent a market surplus in aluminium ballooning this year, a quarterly Reuters poll showed earlier this month.
Producers, including Alcoa Inc and Rusal, have recently blasted China’s swelling exports as a factor behind plunging primary aluminium prices. China’s exports of semi-finished aluminium, used in beer cans and window frames, grew by 30 percent in the first half.
Asked if he was considering launching a trade case against China, Alcoa Inc Chief Executive Officer Klaus Kleinfeld said earlier this month the company was considering all options.
Rusal has also raised China’s swelling aluminium exports with the Australian government, and wants the issue tabled at the next meeting of the world’s top customs body. (Reporting by Melanie Burton; Editing by Himani Sarkar)