Alcoa has announced plans to close or curtail 531,000 metric tons (mt), or 12%, of its worldwide smelting capacity to improve its production-cost position.
Closure of the company’s smelter in Alcoa, Tennessee, USA, and two lines at its Rockdale, Texas, USA, smelter, account for 291,000 mt of the capacity reduction. Curtailments at its smelters in Portovesme, Italy, and La Coruña and Avilés, Spain, account for another 240,000 mt.
At Portovesme, Alcoa will begin a consultation process to permanently close the facility. The La Coruña and Avilés curtailments are planned to be partial and temporary.
The curtailments are expected to be completed during the first half of 2012. Alcoa’s alumina production will be reduced across its global refining system to reflect the curtailments in smelting as well as prevailing market conditions.
At the time of the announcements in mid-January 2012, aluminum prices had fallen more than 27% from their peak in 2011.
Alcoa reported a loss from continuing operations of $193 million in the fourth quarter of 2011 on restructuring charges associated with the closures and curtailments, lower aluminum prices, and continued market weakness. Excluding the net negative impact of restructuring and other special items, the loss from continuing operations was $34 million.
For full-year 2011, Alcoa reported income from continuing operations of $614 million, more than double its 2010 results. The company ended the year in a strong cash position, with $1.9 billion cash on hand. It expects global aluminum demand to grow 7% during 2012 and forecasts a global deficit in primary aluminum supply.