Hydro mulls closing German aluminium plant in June

HAMBURG, April 30 (Reuters) - Hydro Aluminium, the German unit of Norwegian group Norsk Hydro , may stop production at its loss-making aluminium plant at Neuss in Germany in June if talks to cut its power supply costs are unsuccessful, the company said on Thursday. Hydro Aluminium had said in January it might close Neuss, one of west Europe's largest primary aluminium plants, this summer because of high German power costs. [ID:nLR601521] It also announced output cuts as the plant was losing around 300,000 euros a day. [ID:nL5105600] Consideration had been given to stopping output at Neuss as early as May but it was now possible the plant could close at the end of June to give more time for talks with its German electricity supplier RWE , said Hydro Aluminium spokesman Michael Peter Steffen. Hydro was also in discussion with the German federal government about assistance in keeping the plant open, he said but would not give details. "The supervisory board has decided to give more time to the political efforts to achieve a future and better commercial perspective for the plant," he said. "We have not given up hope entirely but if the talks do not produce a fundamental improvement then we could be put in the position in which the long-term or permanent closure of primary production will have to be considered or implemented." Hydro says German electricity costs are up to 50 percent higher than in other west European countries. The Neuss plant has capacity to produce 230,000 tonnes of primary aluminium annually but was currently producing only about 4,000 tonnes a month, he said. Only 102 of the plant's 474 production furnaces were now working. More than 500 jobs could be threatened by closure of primary aluminium output at Neuss, he said. But the Neuss aluminium casting plant with over 300,000 tonnes annual capacity would continue operations. But the casting plant used about 200,000 tonnes of liquid metal from the primary plant and would face changes. "We must examine whether we could process more solid metal at the casting plant or whether we will need to adjust its capacity, this is still unclear." he said. On Wednesday, the company's parent Norsk Hydro announced losses and said it could not see a short or medium term upturn in aluminum markets.