Alcoa recently announced it intends to close or curtail approximately 531,000 metric tons (mt), or 12% of its global smelting capacity, to lower the company’s position on the global aluminum cost curve and improve Alcoa’s competitiveness. The company will permanently close its smelter in Alcoa, Tennessee, which was curtailed in 2009, along with two of the six idled potlines at its Rockdale, Texas, smelter. Together, these closures will reduce Alcoa’s global smelting capacity of 4.5 million mt/y by 291,000 mt, or about 7%. The curtailments, to be announced in the near future, will reduce Alcoa’s global smelting capacity by an additional 240,000 mt, or about 5%.
“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,” said Alcoa Chairman and CEO Klaus Kleinfeld.
Aluminum prices have fallen more than 27% 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 are expected to be complete by the first half of 2012. The curtailments should lower Alcoa’s position on the world aluminum production cost curve by 10%.