Zaporizhya Aluminium Getting Ready to Stop Production?

Zaporizhya Aluminium(ZALK: HOLD) is preparing a plan to stop production, reported Interfax. Acting head of Zaporizhya Region, Valeriy Cherkaska said that the genesis of the plan is rooted in the government’s decision not to set a special energy price for the plant. The company’s management claims that current energy price makes operating Zaporizhya Aluminium unprofitable.Andriy Gerus: Electricity accounts for more than 50% in the company’s cost structure. In 2007, electricity price grew nearly 25%, while aluminum prices dropped 15%. Given that in 2008 aluminum prices have already recovered 12%, we do not think the owners will really stop production and see this as another attempt by the company to exert pressure in order to get a preferable electricity tariff.