Century Aluminum stopping operations due to the rise in energy prices

[actaeon277]

I have zero inside info but I call BS. My company uses tons of aluminum extrusions every month. Our suppliers have doubled prices in the last year and close to tripled lead times. We wait. We absorb what increase we can and we pass along the rest to our customers. Everyone pays roughly the same for energy.

This seems like just an excuse or negotiation tactic. Regardless, I’m sorry for their employees and hope they can find new work quickly. Elkhart in hiring!

Yup.
Everything's gonna go up.
So, why don't they increase their cost?

 

[Cameramonkey]

Yup.
Everything's gonna go up.
So, why don't they increase their cost?

Cant compete with subsidized Chinese Aluminum?

 

[actaeon277]

Cant compete with subsidized Chinese Aluminum?

Well, we have the same problem in the steel industry.
The "free market" isn't to free when you aren't on the same playing field.

 

[ghuns]

Well, we have the same problem in the steel industry.
The "free market" isn't to free when you aren't on the same playing field.

We had an injection mold built in China a couple years ago. It was large(ish), 12-14K pounds. What we paid for the completed mold+air shipping was less than our material cost if we'd have built it ourselves.

It's not quite as lopsided today. Shipping costs have doubled, tripled, then quadrupled, but we're still not in the same ballpark.

China subsidized steel production so their shops' material cost is basically zero. The subsidize tooling and machine tool purchases for their shops. Wouldn't be surprised if they are also subsidizing shipping costs.

 

[Leadeye]

Sad to see the chinese on their way to controlling another industry, I already have to deal with "chinesium" stainless. Makes you wonder what the country will look like in 50 years.

 

[ghuns]

This aluminum plant had a coal fired power plant literally right next door. The coal plant wasn't shut down by tree huggers. It was shut down because some MBA at the aluminum plant discovered they could save a couple (million)bucks buying power from the wholesale market when prices dipped several years ago. Bet they didn't save as much as they're about to lose.

 

[two70]

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Insufficient BTU/lb. content!

In this case inefficiency would be a feature not a bug.

 

[actaeon277]

My steel mill had a power plant.
I think it shut down due to a "monopoly" lawsuit.

 

[BugI02]

Sad to see the chinese on their way to controlling another industry, I already have to deal with "chinesium" stainless. Makes you wonder what the country will look like in 50 years.

Without a sharp course change, quite possibly like Russia looks now - a weak economy overly dependent on raw material exports with an outsized military capability

 

[tackdriver]

We had an injection mold built in China a couple years ago. It was large(ish), 12-14K pounds. What we paid for the completed mold+air shipping was less than our material cost if we'd have built it ourselves.

It's not quite as lopsided today. Shipping costs have doubled, tripled, then quadrupled, but we're still not in the same ballpark.

China subsidized steel production so their shops' material cost is basically zero. The subsidize tooling and machine tool purchases for their shops. Wouldn't be surprised if they are also subsidizing shipping costs.

True, and they are 'subsidizing' shipping, energy, and everything else... if you can call it subsidizing. It's more like a bakery that owns it's own trucks for delivering bread to restaurants and stores. It's just an expense, or COGS, in one business.

Most Americans forget, never consider, or marginalize that They Are Communists. Literally - the government IS THE BUSINESS. It owns and controls ALL OF THEM. That's how communism works. The CCP is one giant monopoly of every industry in their country (along with the military/police, regulatory authority, international diplomacy, courts, etc....etc...)

As long as we consider the Chinese through our own lens, thinking that they function like we do, they will keep eating our lunch. Sooner or later, we will be begging for something to eat.

This is precisely why we need a government that puts the United States of America's interests first, and works diligently to promote and protect our businesses if we hope to survive.

What we have now is a government actively interfering with and hindering US business. It's not accidental, and not just incompetence. It's deliberate and planned. Our adversaries are the direct and indirect benificiaries. Why? Maybe I'm not very imaginative, but I can only come up with one explanation - and it smells traitorous to me. I look forward to being wrong, but not counting on it.

 

[ghuns]

This aluminum plant had a coal fired power plant literally right next door. The coal plant wasn't shut down by tree huggers. It was shut down because some MBA at the aluminum plant discovered they could save a couple (million)bucks buying power from the wholesale market when prices dipped several years ago. Bet they didn't save as much as they're about to lose.

And to be fair, the power plant asked the FERC( Federal Energy Regulatory Commission) to be allowed to sell their now excess power over the MISO lines, to which they were already connected, when they lost their largest customer.

The FERC said, no. We gots plenty of power capacity and your dirty coal burner needs to go away anyways.

That plant is currently being demolished, so it ain't getting de-mothballed or anything.

The FERC is supposed to be run by a "bipartisan" committee. But in recent years their decisions seem to always side with the tree huggers.

 

[Mikey1911]

This aluminum plant had a coal fired power plant literally right next door. The coal plant wasn't shut down by tree huggers. It was shut down because some MBA at the aluminum plant discovered they could save a couple (million)bucks buying power from the wholesale market when prices dipped several years ago. Bet they didn't save as much as they're about to lose.

Precisely!

Alcoa had a philosophy that considered electric power to be an ingredient of aluminum, whose supply it wanted to control the way it mined bauxite or refined alumina. In the second and third decade of the 20th Century we were the largest developer of hydroelectric power in North America. After the government essentially preempted development of prime hydro sites starting in the 30s (through TVA, BPA, and Bureau of Reclamation), Alcoa built lignite- or coal-burning power plants to feed the Rockdale (TX) and Warrick (IN) smelters.

After the antitrust lawsuit and WW2, Reynolds and Kaiser elected to power the defense plant smelters they acquired from the government with electricity from commercial power stations. They secured low-priced power on 30 or 40 year contracts—but when the contracts ran out, the utilities were unwilling to renew the power supply contracts at prices that would allow profitable smelter operation.

When Southwire built Hawesville, Big Rivers had the Coleman Generating Station right next door. The same was true when Anaconda had Alcoa build the Sebree smelter next to another Big Rivers facility.

 

[BugI02]

We cannot remain a first world power without a strong and diverse manufacturing sector. Full stop

 

[ghuns]

We cannot remain a first world power without a strong and diverse manufacturing sector. Full stop

They know.

 

[Bugzilla]

Then why is the price of scrap aluminum in the gutter?

 

[Mikey1911]

We cannot remain a first world power without a strong and diverse manufacturing sector. Full stop

Diversity in our manufacturing base is not the kind of “diversity” (perversity?) that the Donkey Party supports.

Beats me why the AFL-CIO leadership cannot or will not recognize how the fundamentalist environmentalists that control the Jackass Party are totally committed to the destruction of our industrial base.

Then again, I guess “Follow the Money” is the best explanation for that.

 

[Mikey1911]

Then why is the price of scrap aluminum in the gutter?

Secondary metal price will tend to follow the primary price. In March, primary metal was $3851/tonne; today it’s $2450/tonne.

The ChiCom smelters are dumping ingot onto the world market just like the Soviet smelters were doing after the CCCP broke up. The ChiComs want to turn their coal and bauxite into hard currency and depress/demoralize/destroy the non-PRC producers; they don’t care about their metal’s “carbon footprint” or any other environmental considerations.