NEW YORK, Aug 19 (Reuters) - Ormet Corp, an independent U.S. producer of primary aluminum, said it reduced output to four of six potlines through 2009 at its 266,000 tonne-per-year aluminum smelter in Hannibal, Ohio and will lay off up to 100 workers.
It did not say when production would be slowed to four potlines or when it would layoff workers, but only five of six potlines have been running since May 20.
In late July, the U.S. primary aluminum producer said it was deciding whether to cut aluminum output at Hannibal or idle the smelter because of depressed aluminum market conditions and a potential shortage of alumina.
Raw material bauxite is turned into alumina, which is then smelted into aluminum.
Ormet said in a press release this week that it had secured fixed-price sales contracts for its aluminum for September, October and part of November and continues to explore arrangements for its metal output during the rest of the year.
The company also said it has acquired a majority of the raw materials needed to operate the four potlines for the year and anticipates layoffs of no more than 100 people through the rest of 2009.
In July, the aluminum producer issued notices of possible layoffs to 982 employees.
'This has been a tough situation, but we moved quickly to take advantage of the rising prices on the London Metal Exchange,' said Mike Tanchuk, Ormets chief executive officer.
Benchmark aluminum traded on the London Metal Exchange took a steep tumble off the all-time high reached a year ago at $3,375 a tonne down to a 7-1/2-year low in March when global recession drastically cut demand for the metal.
But since the end of July, aluminum prices have risen to a new plateau, with levels reaching highs dating back to last November earlier this month.
Just before the recent price increases Ormet had said it was anticipating further output cuts.
A pending agreement with its power supplier has also helped the aluminum facility keep most of its potlines running.
Tanchuk said Ormet planned to finalize the power supply contract by Labor Day on Sept. 7.
Ormet also announced in late July that the Public Utilities Commission of Ohio approved a nine-year power agreement with American Electric Power-Ohio, that would provide the Hannibal facility with electricity at rates below industrial rates when the aluminum price falls below a predetermined level.
(Reporting by Carole Vaporean; Editing by Marguerita Choy)
((carole.vaporean@reuters.com; 1-646-223-6044; Reuters Messaging: carole.vaporean.reuters.com@reuters.net; Keywords: ALUMINUM ORMET
COPYRIGHT Copyright Thomson Reuters 2009. All rights reserved. The copying, republication or redistribution of Reuters News Content, including by framing or similar means, is expressly prohibited without the prior written consent of Thomson Reuters.
It did not say when production would be slowed to four potlines or when it would layoff workers, but only five of six potlines have been running since May 20.
In late July, the U.S. primary aluminum producer said it was deciding whether to cut aluminum output at Hannibal or idle the smelter because of depressed aluminum market conditions and a potential shortage of alumina.
Raw material bauxite is turned into alumina, which is then smelted into aluminum.
Ormet said in a press release this week that it had secured fixed-price sales contracts for its aluminum for September, October and part of November and continues to explore arrangements for its metal output during the rest of the year.
The company also said it has acquired a majority of the raw materials needed to operate the four potlines for the year and anticipates layoffs of no more than 100 people through the rest of 2009.
In July, the aluminum producer issued notices of possible layoffs to 982 employees.
'This has been a tough situation, but we moved quickly to take advantage of the rising prices on the London Metal Exchange,' said Mike Tanchuk, Ormets chief executive officer.
Benchmark aluminum traded on the London Metal Exchange took a steep tumble off the all-time high reached a year ago at $3,375 a tonne down to a 7-1/2-year low in March when global recession drastically cut demand for the metal.
But since the end of July, aluminum prices have risen to a new plateau, with levels reaching highs dating back to last November earlier this month.
Just before the recent price increases Ormet had said it was anticipating further output cuts.
A pending agreement with its power supplier has also helped the aluminum facility keep most of its potlines running.
Tanchuk said Ormet planned to finalize the power supply contract by Labor Day on Sept. 7.
Ormet also announced in late July that the Public Utilities Commission of Ohio approved a nine-year power agreement with American Electric Power-Ohio, that would provide the Hannibal facility with electricity at rates below industrial rates when the aluminum price falls below a predetermined level.
(Reporting by Carole Vaporean; Editing by Marguerita Choy)
((carole.vaporean@reuters.com; 1-646-223-6044; Reuters Messaging: carole.vaporean.reuters.com@reuters.net; Keywords: ALUMINUM ORMET
COPYRIGHT Copyright Thomson Reuters 2009. All rights reserved. The copying, republication or redistribution of Reuters News Content, including by framing or similar means, is expressly prohibited without the prior written consent of Thomson Reuters.