Dunkirk Aluminum Smelter To Curtail Output by 15%

SEATTLE (Scrap Monster): The Dunkirk aluminum smelter in northern France, owned by private equity firm American Industrial Partners (AIP), announced its decision to cut production by 15%, in response to rising electricity prices. The plant, with an estimated annual output capacity of around 285,000 tonnes, has already cut the output by 10% and is scheduled to cut it by further 5% next week.

Although the company officials decline to comment on possibilities of additional production cuts, union officials at the site expressed fears that the cuts are likely to touch 25% of the total capacity, if electricity prices continue at current levels.

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Dunkirk is only one among several European aluminum plants to reduce output, blaming high electricity costs which make operations non-profitable. It must be noted that Aluminum Dunkerque Industries France had cut output by 3%, citing the same reason.

Nearly 60% of the total electricity requirement at the Dunkirk aluminum smelter is obtained through a preferential rate scheme. However, it has to purchase the remaining 40% at high market prices.

The sky-high electricity prices have been hurting margins of several aluminum producers in the region. The French Finance Minister had recently said that he is working on various plans aimed at curbing the surge in electricity prices.

The relentless surge in European energy prices is feared to threaten the economic recovery in the region.