Davis Index: Market Intelligence for the Global Metals and Recycled Materials Markets

Alcoa expects aluminum and alumina shipments to reach 2.9-3mn mt and 13.8-13.9mn mt, respectively, at the end of 2020, due to better production levels.


The company indicated, while announcing its Q3 2020 results on Oct 14, that while the 2020 guidance for aluminum remains unchanged and slightly  increased for alumina, it expects shipments in both these segments to drop in Q4 2020. 


For aluminum, the decline could come from higher energy costs in Europe as well as the full impact of Section 232 tariffs on European aluminum being felt during the quarter. On the other hand, a change in the customer shipment mix and higher electricity costs would affect the alumina shipments in the last quarter of the year.


In Q3 2020, Alcoa noted it had completed some of its key strategic initiatives, which included the restart of its 413,000mt ABI smelter in Quebec, Canada and the idling of its 279,000mt Intalco smelter in Washington, USA, and its 228,000mt smelter in San Ciprián, Spain.


Alcoa’s alumina production increased to 3.44mn mt in Q3 2020 from 3.38mn mt during the same quarter last year, while its third-party shipments in this segment rose to 2.55mn mt from 2.38mn mt during the same period under comparison.


The firm’s aluminum production increased to 559,000mt in Q3 2020 from 530,000mt in Q3 2019, while its shipments of the product increased to 767,000mt from 708,000mt during the same period. However, the revenue in this segment fell during the quarter due to the lower aluminum prices this year. In the last quarter, the average price of aluminum stood at $1,904/mt compared with $2,138/mt in Q3 2019.


As a result of these lower prices, the company’s consolidated revenue from bauxite, alumina, and aluminum sales during the quarter also fell to $2.36bn from $2.56bn in Q3 2019 but rose from $2.14bn in Q2 2020.


The company reported a net loss of $49mn in Q3 2020, down from a loss of $221mn during the same quarter last year. Its adjusted EBITDA fell to $284mn from $388mn in the same period under comparison.

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