Alcoa to Curtail Refining Capacity

April 6, 2012
Company is taking action to 'avoid aggravating alumina oversupply in the Atlantic region'

Alcoa ( IW 1000/188) announced on April 5 that it will reduce its annual alumina production capacity by approximately 390,000 metric tons to align production with smelter curtailments that Alcoa announced earlier this year.

The curtailments will reduce Alcoa's refining capacity in the Atlantic region by about 4% and are already underway. The Atlantic region represents about 50% of Alcoa's total global refining capacity of 18 million metric tons per year.

"Alcoa is taking these steps to avoid aggravating alumina oversupply in the Atlantic region and to enhance the efficiency of our refining system, said Chris Ayers, president of Alcoas Global Primary Products. We will continue to monitor market conditions and will take further action if warranted.

In January of this year, Alcoa announced the closure or curtailment of 531,000 metric tons of smelting capacity. Of that, 291,000 represented the permanent closure of capacity in Tennessee and Texas that had been idled since 2009. Another 240,000 metric tons, or 5% of Alcoas smelting capacity, represented curtailments to be taken in Portovesme, Italy and La Corua and Aviles, Spain.

Alcoa has reached agreement with government authorities and unions in both Italy and Spain on the curtailments. The 90,000 metric ton curtailment in the Spanish smelters has started and is scheduled to be complete by the first half of this year. The smelter in Portovesme, Italy, with a capacity of 150,000 metric tons, will finalize curtailment by the end of the year.

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