Germany's Spela said on Wednesday it would cut primary aluminum production at its Rheinwerk electrolytic aluminum plant, which has a capacity of 230,000 tons, by 50 percent from October due to high power prices, foreign media reported.
Since energy prices began to rise last year, European smelters have cut an estimated 800,000 to 900,000 tonnes a year of aluminium production. A further 750,000 tonnes of production could be cut in the coming winter, which would mean a bigger shortfall in European aluminium supplies and higher prices.
The aluminum smelting industry is energy intensive. European electricity prices have risen further after Russia reduced gas supplies to Europe, meaning many smelters are paying more to produce than the market price.
Spera said on Wednesday that it would reduce its primary aluminum production to 70,000 tons a year as higher energy prices in Germany left it facing similar challenges to many other European aluminum smelters.
Energy prices have reached high levels in the past few months and are not expected to fall anytime soon.
Spera will begin production cuts in early October and expects to complete them in November.
The company said it did not plan to make compulsory redundancies and would replace reduced production with external metal supplies.
Eurometaux, the European metals industry association, estimates that Chinese aluminium production is 2.8 times more carbon intensive than European aluminium. Eurometaux estimates that Europe's replacement of imported aluminium has added 6-12 million tonnes of carbon dioxide this year.
Benchmark aluminum prices on the London metal exchange were around $2,250 a ton Wednesday.
