U.S. aluminum giant Alcoa, Inc. (AA) said Thursday that it will reduce its annual alumina production capacity by about 2% to align production with smelter curtailments announced earlier this year and to reflect prevailing market conditions.
The company said it will reduce alumina production capacity by 390,000 metric tonnes, all in the Atlantic region, which represents about 50% of its global refining capacity of 18 million tonnes per year.
"Alcoa is taking these steps to avoid aggravating alumina oversupply in the Atlantic region and to enhance the efficiency of our refining system," said Chris Ayers, president of Alcoa's Global Primary Products. "We will continue to monitor market conditions and will take further action if warranted."
In January, Alcoa said it planned to close or curtail about 531,000 metric tons, or 12%, of its global smelting capacity, to cut costs and improve competitiveness as it faces the the twin problems of rising raw material costs and a decline in aluminum prices from their peak in 2011.
Of the 531,000 metric tons, 291,000 metric tons represented the permanent closure of capacity in Tennessee and Texas, while the rest represented curtailments to be taken in Portovesme, Italy and La Coruña and Aviles, Spain.
Alcoa said Thursday that it has reached agreement with government authorities and unions in those European countries on the curtailments.
The 90,000 metric ton curtailment in the Spanish smelters has begun and is scheduled to be complete by the first half of this year, while the 150,000 metric tons capacity Italian smelter will complete curtailment by the end of the year, the company said.
In January, Alcoa reported a fourth quarter loss, hurt by restructuring charges, lower aluminum prices and continued market weakness.
The company is scheduled to report first quarter financial results on April 10. Analysts currently expect the company to report a loss of $0.05 per share on revenue of $5.74 billion for the first quarter.
Alcoa shares are currently trading at $9.65, down 16 cents or 1.63%. The shares trade in a 52-week range of $8.45 to $18.47.
by RTT Staff Writer
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