Alcoa Inc. (AA) announced Wednesday that it will review 460,000 metric tons of smelting capacity over the next 15 months for possible curtailment to maintain the Company's competitiveness, as aluminum prices have fallen more than 33 percent since their peak in 2011.
The company said that the review will include facilities across the Alcoa system and will focus on higher-cost plants and plants that have long-term risk due to factors such as energy costs or regulatory uncertainty. The possible curtailments could affect 11 percent of Alcoa's global smelting capacity.
Currently, the Company has 13 percent, or 568,000 metric tons of smelting capacity idle.
When reviewing smelting capacity for possible curtailment, the company noted that it will consider a wide variety of alternative actions, ranging from discontinuing pot relining to full plant curtailments and/or permanent shutdowns. Alcoa's alumina refining system will also be reviewed to reflect any curtailments in smelting as well as prevailing market conditions.
The company stated that its 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.
Decisions on curtailments and/or closures will be announced as reviews are completed, the company said.
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