UPDATE 2-Noranda delays smelter ramp-up due to aluminum price rout

(Adds sector background, details on power deal)
NEW YORK, July 22 (Reuters) - Noranda Aluminum Holding Co
NOR.N has delayed efforts to ramp up production at its New
Madrid, Missouri, smelter due to a sharp decline in aluminum
prices, President and CEO Kip Smith said on Wednesday, as the
company's quarterly losses widened.
The company had previously expected the 253,000
tonne-per-year smelter to reach full capacity by the third
quarter.
It is currently operating at about 85 percent of capacity,
down from 90 percent in May, Smith said on a conference call to
discuss the company's second-quarter earnings. ID:nL1N0XX1KT
"The economics of ramping up production changed," Smith
said, noting that the company would focus on achieving
"operating stability" and "prudently" increasing production at
the smelter through the fourth quarter of 2015.
The company announced a loss of 25 cents a share for the
second quarter, compared with an eight-cent loss in the same
period of 2014. urn:newsml:reuters.com:*:nWNAB07KA5
Smith said "reliability issues" at the smelter during the
second quarter limited its production and cost the company 8
cents per pound. He has previously blamed higher-than-expected
pot line outages for the slower ramp-up.
The caution in bringing on new capacity is the latest sign
of the pain felt across the global industry as prices on the
London Metal Exchange CMAL3 remain below cost of production
for a big portion of the world's smelters.
Alcoa Inc AA.N and Rusal 0486.HK have both cut output
in recent years.
Prices have plunged 20 percent since September and were at
$1,657 per tonne on Wednesday afternoon. Premiums AL-PREM ,
which are paid on top of the benchmark LME price for physical
delivery, have also fallen at an unprecedented rate this year,
further hurting smelters' margins.
Executives said they had no update on the strategic review
announced last month. ID:nL1N0Z416H
The slow ramp-up is the latest headache for Noranda's only
primary aluminum smelter after a dispute with its power supplier
Ameren Corp AEE.N over electricity rates earlier in the year.
The issue was resolved in April after the Missouri state
regulator forced Ameren to lower Noranda's power prices by 14
percent. urn:newsml:reuters.com:*:nL1N0XR2C8
Ameren has informed the company that it does not intend to
extend the current power contract after it expires in 2020,
meaning Noranda will either have to negotiate a new contract or
find a different provider to keep the smelter running.
ID:nL1N0YO24N