Alcoa (NYSE: AA) today announced that it will close or curtail 164,000 metric tons (mt) of smelting capacity in the United States and Brazil as part of its smelting capacity review that was announced in May.
One potline representing 40,000 metric tons at the Massena East plant in New York will be permanently closed. In addition, the Company has started to temporarily curtail 124,000 metric tons at its smelters in Brazil. The closures and curtailments will be complete by the end of September.
“We committed in May to review our global smelting capacity for possible curtailment to maintain the Company’s competitiveness,” said Bob Wilt, president of Alcoa’s Global Primary Products. “Aluminum prices, including premiums, have fallen to four-year lows and we continue to operate in an uncertain, volatile market.”
Wilt added that the Company will work with stakeholders in affected communities to minimize the impact of the closures and curtailments.To date, Alcoa has announced closures or curtailments representing 269,000 metric tons of the 460,000 metric tons placed under review in May. This includes the permanent closure of 105,000 metric tons of capacity announced earlier at Alcoa’s Baie-Comeau smelter in Canada. In addition, the Company permanently closed its Fusina, Italy smelter representing 44,000 metric tons that was not part of the May review. Once the Massena and Brazil closures and curtailments are complete, Alcoa will have 16 percent, or 646,800 metric tons of smelting capacity idle. Alcoa’s review of its primary metals operations is consistent with the Company’s 2015 goal of lowering its position on the world aluminum production cost curve by 10 percentage points and the alumina cost curve by 7 percentage points. Total restructuring-related charges for third quarter 2013 associated with the above actions are expected to be between $5 and $10 million after-tax, or $0.01 per share, of which approximately 50 percent is non-cash.
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