Aluminium industry to face price challenge

An uncertain global economy, a rising Australian dollar and the government's impending carbon tax is impacting the longevity of the aluminium industry in Gladstone.

The region's major plants have come under strain after the market value of aluminium dropped.

Stability of the sector has also been questioned following the shutdown of Hydro Aluminium's Kurri Kurri smelter in New South Wales and forced redundancies at Alcoa's Port Henry smelter in Victoria.

Australian Aluminium Council Ltd Executive Director Miles Prosser said there were a number of factors that were impacting the strength of the aluminium industry.

"Aluminium is at a lower price than it was 10-15 years ago." Mr Prosser said.

A Boyne Smelters Limited spokesperson said the industry was facing "significant short-term challenges" but had invested $720 million over the past four years to improve the business. BSL listed a reduction in aluminium prices, high exchange rate, higher input costs and lower demand caused by global economic uncertainty as factors influencing the problem.

"BSL has plans to deal with these headwinds and is continuing to produce more than 560,000 tonnes of aluminium each year," the spokesperson said.

"At a time when the aluminium industry is facing tough market conditions, these improvements place BSL in a strong position going forward."

A Rio Tinto Alcan spokes person said the company was well positioned to weather the current uncertainty with their $2.4 billion expansion to their Yarwun site this month.

"This expansion has seen the Yarwun workforce increase by 200 people," the spokesperson said.