Alcoa to Cut Smelter Capacity

The company has announced plans to permanently close its smelter in Alcoa, Tenn., which was curtailed in 2009, along with two of the company’s six idled potlines at its Rockdale, Texas, smelter. Together, the closures will reduce Alcoa’s global smelting capacity of 4.5 million metric tons per year by 291,000 metric tons, or about 7 percent. 

 

In Europe, Alcoa also announced that it is curtailing production at its smelters in Portovesme, Italy, and La Coruña and Avilés, Spain. The smelters represent 240,000 metric tons, or 5 percent, of Alcoa’s global capacity.

In addition to the closures and curtailments, Alcoa will aggressively accelerate actions to reduce the cost of raw materials used by its primary products business and will adjust alumina production across the company’s global refining system to reflect internal demand as well as prevailing market conditions.

“These are difficult but necessary steps to improve Alcoa’s competitiveness, preserve and grow shareholder value and protect jobs in the rest of the Alcoa system,” Alcoa Chairman and CEO Klaus Kleinfeld, says. 
 

In deciding to shutter capacity, Alcoa says aluminum prices have fallen more than 27 percent from their peak in 2011. In addition to the curtailments, the company will accelerate actions to reduce the escalating cost of raw materials. 
 

The curtailments will contribute to the company’s goal of lowering Alcoa’s position on the world aluminum production cost curve by 10 percent.