Global aluminum producer Alcoa has asked its Japanese buyers on annual term contracts to cancel December shipments, following a recent power outage at its Portland smelter in Australia, the buyers said Thursday.
Brian Doy, director of corporate affairs at Alcoa Australia, said he was not able to give updates on the outage impact, in an email to S&P Global Platts.
Alcoa said on Monday that production at one of two potlines at the Portland smelter remains halted following a power outage on December 1, while production has been partially curtailed at the other potline.
Japanese buyers of Portland metal said the smelter's run rate was reduced to 20%-30% of normal operations and this has forced Alcoa to cut its December shipment volume. This could not be confirmed with Alcoa.
The smelter was producing 26,000 mt/month of aluminum ingot before the outage.
The smelter ships aluminum to Japan, South Korea, Taiwan and other Southeast Asian countries. Annual contracts typically run from January to December, where monthly shipment volumes are fixed, Japanese buyers said.
Some contracts are for Portland-specific metal, while there are other contracts that state the ingot specifications only, leaving the option for Alcoa to deliver other brands that are similar to Portland metal, the buyers said.
A Japanese trader said the Portland volume cut will impact South Korea and Vietnam more than Japan.
Imports of Australian aluminum into South Korea and Vietnam are duty free, while imports from other countries are hit by duties.
In Japan, all aluminum imports are duty free.
