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Alcoa to close one U.S. smelter, idle alumina facility

Operations at Alcoa Intalco Works in Ferndale, as seen Sept. 19, 2013, in this aerial photo, are being curtailed early in 2016. On Jan. 7, Alcoa announced another smelter shutdown and curtailing of a Texas operation.
Operations at Alcoa Intalco Works in Ferndale, as seen Sept. 19, 2013, in this aerial photo, are being curtailed early in 2016. On Jan. 7, Alcoa announced another smelter shutdown and curtailing of a Texas operation. The Bellingham Herald

The U.S. aluminum industry continues to struggle with low global market prices, as Alcoa announced another smelter closure and the idling of a Texas alumina production facility.

The company announced in a news release on Thursday, Jan. 7, that it would permanently close its Warrick Operations smelter in Evansville, Ind., and curtail operations at its Point Comfort plant in Texas.

With this latest announcement, Alcoa will be left with just one active smelter, the Massena West plant in New York, which was saved from closure with $70 million in New York state aid, according to a Reuters article.

Alcoa pointed to low global prices as a factor in these decisions. Prices have been dropping even after its announcement in November that it was idling its smelter operations in Wenatchee and the Intalco Works facility near Ferndale. The price for aluminum was $1,456 a ton on the London Metal Exchange on Jan. 7; Bloomberg news has estimated that prices need to be around $1,500 a ton for a U.S. smelter operation to break even.

Alcoa’s latest announcement is another blow for the local Intalco Works smelter operations. At the time it announced the curtailment of Intalco’s smelter operations, Alcoa officials said they would continue to monitor factors like aluminum prices to determine if and when it would restart its U.S. smelters.

Intalco is currently going through the curtailment process, which is expected to be finished in the coming weeks. That will mean layoffs for about 465 employees at the Ferndale operation.

The company plans to keep its casthouse operation going at Intalco, employing about 100 people.

In the announcement about the Warrick and Point Comfort operations, Roy Harvey, president of Alcoa’s global Primary Products, said they recognize how much this is impacting workers in the company.

“Despite the hard work of employees, these assets are not competitive,” Harvey said in the news release. “We’re confident that these actions are the right ones in face of these challenging market conditions.”

Article corrected on Jan. 8 to point out that the Point Comfort operation is an alumina production facility.

Dave Gallagher: 360-715-2269, @BhamHeraldBiz

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