German firm Speira announced the decision to halt aluminium smelting at its Rheinwerk plant, shutting down fully at a plant that cut production by half only last year.
The firm said that a precipitous rise in energy prices recently has put the aluminium manufacturing plant in a serious bind. Western Europe is in the midst of an energy crisis that began in 2021 with Russia’s invasion of Ukraine. Although the power market is on the mend, the aluminium sector continues to feel the heat. Last year aluminium output dropped by 12.5 percent largely due to the energy situation.
In a press release, Speira announced the closure.
“Speira decided to fully ramp down the smelting operations in Rheinwerk.”
The firm went on to say that it plans to invest €30 million (US$32 million) to increase the plant’s recycling capacity.
In October, Speira slashed production at Rheinwerk by 70 thousand metric tons per annum, citing a spike in power prices for its decision.
Ultimately, Speira says the closure of the Rheinwerk aluminium smelter will effectively transition the firm into an aluminium rolling and recycling company. Around 300 workers at the plant will lose their jobs, but Speira will continue to meet current contractual obligations by buying primary aluminium from third parties.
Speira is one of many European aluminium companies feeling the squeeze from high power prices. As power prices rose, aluminium prices fell, off by more than a third since last year’s record high. Abating fears of sanctions on Russian aluminium and lagging demand in the People’s Republic of China have kept prices low for the past several months.