Company will slash 150,000 metric tons of aluminum smelting capacity in Brazil.
The aluminum firm Alcoa has announced plans to curtail 147,000 metric tons of smelting capacity at its São Luís (Alumar) and Poços de Caldas smelters in Brazil. The aluminum firm cites challenging global market conditions in primary aluminum and increased costs that have made the two smelters uncompetitive as reasons for the decision. The curtailments are expected to be complete by the end of May 2014.
Alcoa adds that it cut 34,000 metric tons at Poços and 97,000 metric tons at São Luís in 2013. The new curtailments will include the remaining 62,000 metric tons of capacity at the Poços smelter, resulting in a full curtailment of its three potlines. Another 85,000 metric tons will be curtailed at São Luís.
“Across the globe, we are taking measures to curtail high-cost smelting capacity that is not competitive and reshape our cost profile,” says Bob Wilt, president of Alcoa Global Primary Products. “These are difficult but necessary actions in support of Alcoa’s strategy to lower the cost base of our upstream businesses.”
As a result of the smelter curtailment, the Poços refinery will reduce production accordingly. The mine, aluminum powder plant and casthouse at Poços will continue normal operations, as will the refinery at São Luís. Other Alcoa operations in Brazil are not affected.
In May 2013, Alcoa placed 460,000 metric tons of smelting capacity under review. Once all announced curtailments and closures are complete, Alcoa says it will have about 800,000 metric tons, or 21 percent, of smelting capacity offline.