LONDON (Reuters) – Alcoa is bringing one of its U.S. aluminum smelters back from the dead. The Warrick smelter in Indiana has annual capacity of 269,000 tonnes, its own coal-based power source and is integrated with a rolling mill.
None of which saved it from Alcoa’s scramble down the cost curve in the face of falling prices, culminating in its permanent closure in January 2016. That’s different from what the industry calls a “curtailment”, a temporary idling for possible restart.
But now, miraculously, Warrick is back and Alcoa will fire up three of the plant’s five production lines, with capacity of 161,400 tonnes of aluminum. The other two will be classified as “curtailed”. The timing of this resurrection is politically charged.
The Trump administration is determined to curb imports of aluminum, along with steel, with the aid of some heavy national security artillery. The results of both so-called Section 232 investigations are pending. And Alcoa, for one, “appreciates the actions the Trump administration has taken to address the challenges faced by the U.S. aluminum industry, including Chinese overcapacity”.
The United States had 23 operating plants in 1998. It now has five, soon to be become six. There is a little more than a million tonnes of capacity lying idled, ready for restart if the conditions are right.
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