Alcoa's Intalco Works in the Pacific northwest state of Washington yesterday produced the first molten metal from a re-energised potline that represents part of a broader reactivation of idled US capacity.
Intalco (aka Ferndale) had been operating just one 95,000tpy line since 2004. Alcoa announced the restart of a second line late last year, utilising an interim deal with power supplier the Bonneville Power Administration (BPA).
In essence the interim deal—the BPA has deferred until 2011 a definitive decision on whether/how to subsidise heavy power users in its catchment area—sees the BPA contribute money to allow customers to purchase energy on the free market.
The deal is also thought to have persuaded Swiss trade house Glencore to reactivate some of the idled capacity at its 168,000tpy Columbia Falls smelter in Montana. The plant has been operating one line at around 34,000tpy since the back end of 2003. There has been no official announcement about the timing or size of the restart but local press have quoted plant management as saying it will be some time early this year and the betting in the market is it will be another 35,000tpy line.
Waiting in the wings is Golden Northwest, which has two smelters: the 168,000tpy Goldendale smelter in Washington and the 82,000tpy Dalles plant in Oregon. The last time either produced any metal was in early 2003 and the company has spent a prolonged period in bankruptcy protection. But it too has been making positive noises about the possibility of at least a partial restart.
The biggest and most unlikely restart of what looked like dead capacity is already underway at Ormet Corp's 268,000tpy Hannibal smelter in Ohio.
The company began winding down capacity at Hannibal over the course of 2004. The final potline shut early 2005 under the combined weight of power-supply problems and the start of what proved to be a bitter and protracted strike by the local United Steelworkers. The subsequent sale and part dismantling of the adjacent rolling mill had most analysts, including ourselves, consign Hannibal to the history books.
However, the arrival of a venture capital backer and a new chief executive saw first a deal with the union reached and then a power supply deal. The smelter has already reactivated two lines and Ormet has publicly said it intends to have all six back up at full capacity some time during the second quarter.
Our base case assumption is that between them the Ferndale, Columbia Falls and Ormet restarts will amount to close to 400,000tpy of idled capacity being reactivated by the middle of this year. That figure could go up if Golden Northwest manages to get any of its capacity back up and running, on which the jury is still out, in our view.
Nor should we forget Alcoa's Eastalco smelter in Maryland, which closed at the end of 2005. The company described it as a temporary shutdown at the time and it has since emerged it is looking at building a coal-fired power plant that would serve both the 195,000tpy smelter and the nearby Indian Head Naval Warfare Centre.
It seems that old aluminium smelters in the US don't die, they just rest for a while.
豫公网安备41010502003434号