LONDON (Reuters) - Germany's Speira said on Thursday it will shut the aluminium smelting operations at its Rheinwerk plant due to high energy prices, after it was forced to halve production last year.
Although Western Europe's energy crisis, which began in 2021 and worsened after last year's Russian invasion of Ukraine, has passed its peak, it is still affecting power-intensive aluminium production. Output in Western Europe fell by 12.5% in 2022.
"Speira decided to fully ramp down the smelting operations in Rheinwerk," the company said in a statement, adding that it will invest 30 million euros ($32 million) to boost recycling capacity at the Rheinwerk plant.
Speira, which cut aluminium production at the plant by 50% in October due to high power prices, said its decision to close the remaining 70,000 tonnes of liquid aluminium production at Rheinwerk in the second half of 2023 will transform it into an aluminium rolling and recycling company.
The decision will impact about 300 workers, but Speira said customers will not be affected as it aims to fulfil contracts by replacing the lost production with external metal supplies.
Production costs are still high for many European smelters, while aluminium prices on the London Metal Exchange have fallen by 37% since reaching their peak a year ago.
Prices slumped after market concerns about potential sanctions on Russian metal did not materialise and the lifting of strict COVID-19 restrictions in China have yet to revitalise consumption there.
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(Reporting by Polina Devitt; Editing by Alexander Smith)