Alcoa May Close Or Sell Some Aluminum Plants To Cut Costs

Alcoa Inc. may close or sell 14 percent of its smelting capacity and 16 percent of its refining capacity in a move to lower costs in the face of falling aluminum prices and higher production in China.

New York-based Alcoa, which has significant operations in Pittsburgh, said it will review high-cost operations across its global system of aluminum production facilities over the next 12 months.

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Higher Aluminum Prices Help Alcoa

Map of Pennsylvania highlighting Allegheny County (Photo credit: Wikipedia)

One of Alcoa’s biggest initiatives in recent years has been shuttering outdated, inefficient smelters and focusing on more lucrative downstream markets like aerospace and automotive.

Just as that strategy is bearing fruit with the introduction of the aluminum-intensive Ford F-150 pickup truck and long-term supply agreements with Boeing and Pratt & Whitney, strengthening aluminum prices are making Alcoa’s aluminum production business less of a poor stepchild and more of a diamond in the rough.

Aluminum spot prices reached $2,100 per metric ton recently, up from as low as $1,700 earlier in the year, according to Morningstar analyst Andrew Lane.

Read more: http://www.post-gazette.com/business/2014/09/20/Higher-aluminum-prices-help-Alcoa/stories/201409200040

Alcoa Has Profitable Third Quarter

English: HABS No. PA-6724-2. View of entrance to ALCOA Building from southwest. ALCOA Building (a.k.a. Regional Enterprise Tower), 425 Sixth Avenue, Pittsburgh, Allegheny County, Pennsylvania. Entrance pavilion built of glass and aluminum. Design by Harrison and Abramovitz. (Photo credit: Wikipedia)

Alcoa today reported a small profit in the third quarter, saying productivity improvements offset lower sales and falling aluminum prices.

The company said it earned $24 million, or 2 cents per share, on sales of $5.77 billion vs. a loss of $143 million, or 13 cents per share, and sales of $5.83 billion in the year-ago quarter.

The results included $109 million in after-tax restructuring charges related to shutting down smelters in the face of a glut in aluminum supply. Alcoa said it has idled 274,000 metric tons of high-cost capacity in the last five months.

Read more: http://www.post-gazette.com/stories/business/news/alcoa-has-profitable-third-quarter-706729/#ixzz2hARy0Nrl