Europe’s largest power-intensive primary aluminum plant has announced plans to curtail its production. Aluminum Dunkerque will start reducing production from the beginning of next week, it should decrease by 22% by the end of September, according to Bloomberg, CEO Guillaume de Goys.
At the same time, the company is in a better position than some of its European competitors, as part of its electricity consumption is covered by purchases from the semi-state EDF at a regulated price under the ARENH program, which is normally 42 EUR/MWh. Last year, the plant produced 290,000 tons of aluminum. The French aluminum plant already reduced its production by 15% during last winter, but since June the plant has been producing again at full capacity.
“The primary aluminum industry in Europe has already paid a heavy toll for this energy crisis. If we cut production further, we will be in a position where the primary manufacturing industry will disappear from Europe entirely. That would be bad for Europe from the point of view of sovereignty,” said Guillaume de Goys.
Aluminum production in Europe fell to its lowest level since the 1970s due to high costs, according to Bloomberg. Aluminum Dunkerque is not the only manufacturer limiting the operation of its facilities, another example is the Norwegian group Norsk Hydro, which recently announced plans to end production at the Slovakian aluminum smelter Slovalco.
“Now prices are too high to resume production at full capacity. The break-even point is around 250 EUR/MWh,” de Goys added.
According to the company, the currently announced production restrictions should not have a significant impact on employees at the affected plant. According to the executive director, the company will ask employees to take a vacation, use the free time for training or consider reassignment to other positions. Finally, the company could also consider forced leave.