Alcoa delays curtailment of Intalco smelter until end of second quarter

The Great Smoky Mountains are shown in the background in this view of the Alcoa Aluminium plant in Alcoa, Tennessee. REUTERS/Wade Payne

(Reuters) - Alcoa Inc said it will delay the curtailment of its Intalco Works smelter in Ferndale, Washington until the end of the second quarter of 2016.

The metals company said in November it planned to idle the 260,000 tonne-per-year smelter by the end of the first quarter.

“Recent changes in energy and raw material costs have made it more cost effective in the near term to keep the smelter operating to provide molten metal to the plant’s casthouse,” the company said.

Alcoa has been curtailing smelting capacity as the industry endures tumbling prices amid rising trade tensions with China. The company said this month it would close a plant in Evansville, Indiana, which would bring U.S. aluminum output to its lowest level in more than 65 years.

Alcoa said it expects to remove about 25 percent operating smelting capacity and about 20 percent of operating refining capacity by mid-2016.

Many aluminum producers have cut loss-making capacity or shut down completely over the past year as London Metal Exchange prices and physical premiums have tumbled amid rising exports of semi-fabricated products from China and high energy costs.

Reporting by Radhika Rukmangadhan and Subrat Patnaik in Bengaluru; Editing by Don Sebastian