Aluminum price soars as China cancels tax incentive on exports
The export tax rebate was also removed for copper and lowered for some refined oil, solar, battery and non-metallic mineral products.
Aluminium Dunkerque Industries France has curbed production of the metal in the past two weeks in response to a surge in power prices, according to a labor union representative.
The cuts equate to about 3% of Aluminium Dunkerque’s production capacity, said union representative Laurent Geeraert. The plant has lost about 20 million euros ($22.6 million) since the beginning of November, and further curtailments may be necessary if power prices remain at sky-high levels, he said. A second person familiar with the operations confirmed the cuts.
While aluminum prices have rallied more than 40% this year and demand for the plant’s products is booming, profitability is being eroded by the far greater surge in power prices over the past few weeks. At one-month baseload prices in France, it would cost about $11,000 for the power typically needed to make one ton of aluminum, which was trading at about $2,800 a ton on the London Metal Exchange on Wednesday.
Further cuts in output will also depend on the plant’s need to fulfill its contracts to supply customers, said Geeraert. Aluminum smelters are typically slow to curb production as the costs of shutting down and restarting capacity are high.
Aluminium Dunkerque is Europe’s largest primary aluminum smelter and a prized industrial asset that’s of strategic importance to the French state. Private equity firm American Industrial Partners seized control of the smelter in October by foreclosing on debts held by Liberty Industries France, a unit of Sanjeev Gupta’s distressed GFG Alliance.
(By Irene García Pérez, Jack Farchy and Mark Burton)
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