Century announces third aluminium smelter curtailment in 2 months

Century aluminium Co, controlled by Glencore Plc, said it will curtail one of three potlines at its Sebree, Kentucky, aluminium smelter by December 31, the company's third capacity reduction in two months as weak prices bite.

The curtailment will reduce the 210,000 tonne-per-year plant's capacity by around 70,000 tonnes and comes just one week after it announced plans to close its 224,000-tonne Mount Holly, South Carolina, smelter by Dec. 31 if it does not receive a favorable power deal.

Century blamed the need to close the Sebree potline on low aluminium prices due to Chinese overcapacity and rising exports, resulting in a sharp drop in aluminium futures and the premiums paid for physical delivery of the metal have fallen sharply, harming producers.

In late August, it announced plans to reduce production at its 244,000 tonne-per-year Hawesville, Kentucky, smelter, which is currently operating at 40 percent of capacity. Only Century's 260,000 tonne-per-year smelter in Grundartangi, Iceland has remained unscathed.

Century spokesman Kenny Barkley said the closure was "very disappointing" and that the fall in aluminium prices on the London Metal Exchange to more than six-year lows this week at $1,460 a tonne prompted the decision to close.

The closure comes as pressure has mounted on U.S. authorities to take action on Chinese exports. U.S. producers have alleged that China mislabels exports as semi-fabricated aluminium in order to avoid an export tax on primary aluminium, only to have the products re-melted later in the supply chain.

The U.S. aluminium Association has asked federal authorities to investigate the exports, and last week the U.S. aluminium Extruders Council accused a Chinese extruder of evading U.S. duties as the dispute between the United States and the world's largest aluminium producer escalates.

Barkley called for action to stop the Chinese exports. "The whole aluminium industry needs help," Barkley said. "There's only eight smelters left in the U.S. and two of them for sure, if not three, have reduced capacity. We've got to have somebody look at these issues on the national level."

Century plans to lay off around 150 of Sebree's 525 employees after the curtailment.