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09 JULY 2021 AL CIRCLE

Romanian aluminium producer ‘Alro’ needs to count 30% of consumption on the spot market

EDITED BY : RUPANKAR MAJUMDER 2MINS READ

One of Europe’s largest vertically integrated aluminium producers by production capacity and trading on the Bucharest Stock Exchange, Alro needs to cover some 30% of its consumption through the spot market purchases, following multiple suppliers discontinued their contracts.

Alro needs to count 30% of consumption on the spot market

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Alro is considered one of the biggest power consumers in Romania and the largest company with a vital contribution to local and national economic development.

The spot market price hikes on one hand stressed the suppliers to discontinue their contracts, as it was pre-assumed that they were not shielded by long-term agreements with power producers for the quantity sold in advance to the aluminium producers, however, it also leaves Alro exposed to high production costs.

Alro’ needs to count 30% of consumption on the spot market

Marian Năstase, Chairman and non-executive member of the Board of Directors, Vimetco ALRO, said: “There are many bubbles in the energy market.”

He further explained: "Last year, electricity was sold short during the pandemic, the price in day-the ahead-market (DAM, the spot market) was very low, and everyone thought it would be even lower. They sold energy on the market under long-term contracts without having it, based on assumptions that they will buy cheaper in DAM next year. But the price in the DAM has risen, among other things, because of the decarbonization steps.”

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“When the delivery deadline came, the one who had to deliver the energy preferred to break the contract than buy from DAM, and the bubble burst."

Tagged with:

Aluminium Energy Europe

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EDITED BY : RUPANKAR MAJUMDER 2MINS READ

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