Boston, MA 10/17/2013 (wallstreetpr) – The aluminum producer and the largest foreign investor in China, Alcoa Inc (NYSE:AA)has announced immediate shutdown of one of its smelters in Saudi Area at Ma’aden. The shutdown is however temporary, the company has clarified.
The reason for this smelter closure is connected to instability glitch with one of two plotlines. A potline include a series of containers in the aluminum smelting process.
The Suadi Ma’aden smelting project is a $10.8 billion facility whose capacity had earlier been put at 740K tonnes per year. This Ma’aden facility is a joint venture of Saudi Arabian Mining Co. and Alcoa Inc. following the suspension of production in the smelter, Alcoa has moved to rule out any impact on the customers.
But with reopening of the smelter only expected sometime next year, it remains to be seen how the aluminum company is going to make up meet its output target.
The news of smelter shutdown by Alcoa reached the London Metal Exchange and briefly moved things to the positive territory. It is reported that at 10 a.m EDT, the metal exchange market witnessed a day’s high of $1,855.75 per tone; slightly over an hour later, the per ton value shifted to 1,857.00.
In the face of weak aluminum prices, Alcoa had placed higher premiums on the Ma’aden project. It is big and it is also the miner’s lowest-cost facility globally.
It means that increase output here was going to cut the company’s expenses in the weaker market, while bolstering its revenue collection. But how a glitch has set in and few things might go wrong somewhere.
As one smelter is now down, Alcoa has announced all other operations running on schedule. The company is also seeking to bolster its production in more low-cost facilities to keep its bottom line up. As at 2.40 p.m EDT, Alcoa’s shares where trading north $0.11 (+1.31%) and the market value stood at $9.06 billion.
