25 JUNE 2012Dailymail
Price of aluminum drops further as Century lobbying for lower rate
Edited by : AL CIRCLE
2 min read
As Century Aluminum lobbies for a new power rate that could force Appalachian Power customers to pay higher bills when aluminum prices drop, the price of aluminum is doing just that.
Aluminum prices closed $1,879.50 per ton on the London Metals Exchange Thursday morning. This week was the first time prices dipped below $1,900 since a brief market decline in early 2010. Aluminum prices have dropped more than $100 since Century filed its rate case with the state Public Service Commission last month.
The recent drop is part of a global commodities sell-off driven by the economic worries in Europe and fears that the pace of U.S. economic growth is slowing.
Aluminum has fallen markedly since Century officials announced plans to restart the idled Ravenswood plant. The company closed that plant during the recession in 2009, laying off more than 650 workers in the process.
When chief executive Micheal Bless told shareholders in February the restart was a "top priority" this year, aluminum was trading at nearly $2,300.
The price has dropped about $400 per ton since then.
Falling prices mean consumers would have to pay more, should the PSC approve a special power rate structure that Century officials say is needed to help restart the plant.
AEP noted that if the price continued to fall to about $1,700 per ton, Century would pay nothing for its power. Other customers would have to pay $126.7 million in total, with residential customers paying an average $17.82 more per month.
The Consumer's Advocate Division of the PSC asked Century to provide further details on what consumers would be expected to pay if prices fell below $1,700, to as far as $1,300.
Century officials have responded they don't believe prices will drop that far.
They maintain that aluminum prices should rebound over the next 10 years.
Under the proposed rate structure, if aluminum prices go above $2,447 per ton, Century will begin paying extra on its power bill to reimburse other customers.
Company officials believe prices will rebound enough so that other power customers would be reimbursed by the end of the 10-year period.
Aluminum prices closed $1,879.50 per ton on the London Metals Exchange Thursday morning. This week was the first time prices dipped below $1,900 since a brief market decline in early 2010. Aluminum prices have dropped more than $100 since Century filed its rate case with the state Public Service Commission last month.
The recent drop is part of a global commodities sell-off driven by the economic worries in Europe and fears that the pace of U.S. economic growth is slowing.
Aluminum has fallen markedly since Century officials announced plans to restart the idled Ravenswood plant. The company closed that plant during the recession in 2009, laying off more than 650 workers in the process.
When chief executive Micheal Bless told shareholders in February the restart was a "top priority" this year, aluminum was trading at nearly $2,300.
The price has dropped about $400 per ton since then.
Falling prices mean consumers would have to pay more, should the PSC approve a special power rate structure that Century officials say is needed to help restart the plant.
AEP noted that if the price continued to fall to about $1,700 per ton, Century would pay nothing for its power. Other customers would have to pay $126.7 million in total, with residential customers paying an average $17.82 more per month.
The Consumer's Advocate Division of the PSC asked Century to provide further details on what consumers would be expected to pay if prices fell below $1,700, to as far as $1,300.
Century officials have responded they don't believe prices will drop that far.
They maintain that aluminum prices should rebound over the next 10 years.
Under the proposed rate structure, if aluminum prices go above $2,447 per ton, Century will begin paying extra on its power bill to reimburse other customers.
Company officials believe prices will rebound enough so that other power customers would be reimbursed by the end of the 10-year period.
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