Alcoa has announced that it is delaying curtailment of the Intalco Works aluminum smelter until the end of June.
The plant west of Ferndale was initially slated to be idled by the end of March, but recent changes in energy and raw material costs have made it more cost-effective in the near term to keep the smelter operating, the company said in a news release Tuesday, Jan. 19.
The curtailment at the end of March would have meant layoffs for about 465 workers. The company plans to keep the casthouse in operation after the curtailment at the end of June, employing about 100 people.
With the idling of the smelter delayed for another three months, the company is temporarily postponing some of the programs to help employees once they’ve been laid off, such as career fairs, said company spokesman Josh Wilund.
It remains unclear what the long-term future will be for smelter operations near Ferndale. Wilund stressed that the latest announcement was for the delay of curtailment.
“In general, decisions on curtailments or restarts are based on a series of factors ranging from global market conditions, regulatory certainty, capital investments, energy pricing and alignment with Alcoa’s strategy to create a globally competitive commodity business,” Wilund said in an email.
This buys us some time and expands the opportunity that this (smelter operation) will continue.
Glenn Farmer, business representative for International Association of Machinists Local 2379 District 160
The news came as more of a relief than a surprise to Glenn Farmer, business representative for International Association of Machinists Local 2379 District 160.
Not only does it mean three more months of paychecks for the workers, it also provides more time to find solutions that could keep smelter operations going longer-term. He acknowledged that the extension of uncertainty makes it tough on families as workers try to make career decisions.
“This buys us some time and expands the opportunity that this (smelter operation) will continue,” Farmer said, adding that operations remain “business as usual” for the time being.
It’s an opportunity other Alcoa smelters didn’t get. Operations at the Wenatchee smelter were curtailed in December, while Alcoa is closing or curtailing several other operations across the U.S.
Along with many other commodities, such as oil on the global market, the price for the raw alumina fell significantly in 2015. According to Alcoa in a news release announcing the closure of an alumina production facility in Texas, the price index for alumina fell about 40 percent last year. Alumina is a main raw material used at aluminum smelters.
Something that has not changed much in recent weeks is the price for aluminum. According to London Metal Exchange, the price for a ton of aluminum was $1,486 on Tuesday, Jan. 19. After rising to $1,540 a ton at the end of December, the price has remained below the $1,500-a-ton level so far in 2016
Once all announced curtailments and closures are complete, Alcoa will have removed approximately 25 percent of its operating smelting capacity and approximately 20 percent of operating refining capacity by mid-2016, according to the news release. Alcoa globally will have 2.1 million metric tons of operating smelting capacity and 12.3 million metric tons of operating refining capacity remaining.
Washington Sen. Doug Ericksen, R-Ferndale, said the Alcoa announcement was “terrific news” for the community.
“Now we have a bit of breathing space, and we can roll up our sleeves and get to work on a permanent solution,” Ericksen said in a news release. “I will be working with legislators on both sides of the aisle, the Bonneville Power Administration and other interested parties to find ways to keep the plant open for good.”