Nov 2 (Reuters) – Alcoa Inc said on Monday it will idle three of its four active U.S. aluminum smelters, slashing annual capacity by 500,000 tonnes, in the steepest cuts yet by an aluminum producer to battle oversupply and sinking metal prices.
The company said in a statement it will suspend its Intalco and Wenatchee smelters in Washington state and the Massena West smelter in New York state. It will also permanently close Massena East, also in New York, which was shuttered in 2014.
The move will reduce Alcoa’s smelting capacity by a further 503,000 tonnes annually, leaving the Evansville, Indiana, smelter as its sole U.S. primary plant. It produces 269,000 tonnes per year.
For Alcoa, the measures come as it prepares to break itself in two, separating the faster-growing plane and car parts business from traditional upstream operations.
The cuts are the biggest since the year-long rout in benchmark aluminum prices and the collapse in premiums, paid for physical delivery, earlier this year, pushing many of the world’s smelters into the red.
Prices have plunged by a third since September 2014 and are languishing at six-year lows around $1,450 per tonne amid concerns about waning demand and a ballooning surplus.
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