On Thursday, May 1, the US aluminium giant Alcoa Corporation informed the media and stakeholders that its order book for the second quarter remains stable, despite US tariffs. CEO William Oplinger stated that the company has yet to observe any negative impact on bookings due to the tariffs; but could not give a positive outlook for the months to come, citing customer feedback that signals potential challenges ahead.
Outlook under review amid tariffs and power outage
In addition to the tariff pressure, Alcoa is now grappling with a new obstacle and that is power outage in Spain, which has disrupted operations at both its aluminum smelter and alumina refinery. The company is currently assessing the full extent of the operational and financial damage at its San Ciprián facility, the largest integrated aluminum plant in Spain. While the evaluation continues, Alcoa is preparing for the possibility of further risks to its business.
Already back in April during its Q1 earnings call, Alcoa projected losses of approximately USD 90 million in Q2 2025, directly tied to the 25 per cent US tariff on Canadian aluminum imports. Alcoa produces 70 per cent of its aluminium in Canada, and the company has no immediate plans to set up new smelters in the US. First of all, building a full-fledged aluminium smelter takes at least 5 to 7 years, and the US lacks economically viable raw material deposits. Added to this, the blow of the Spanish power outage compounds Alcoa’s mounting concerns.
Commenting on power outage, Oplinger remarked, "At this point, we don't yet have an answer to what happened to the energy in Spain, and in my view, we will take some days to evaluate the risks associated with further losses of power. If the grid doesn't understand what happened, it is very difficult to have an electro-intensive business in a place that can't guarantee that the electricity will stay on."
San Ciprián Smelter put to the test amid crisis
The power failure is particularly untimely, coming just weeks after Alcoa had announced the San Ciprián smelter was ready to operate at around 91 per cent capacity in collaboration with IGNIS EQT, following a strategic Viability Agreement signed in 2021. The facility’s on-site casthouse was set to cast and ship ingots across Europe and beyond. At this crucial juncture, the unprecedented power outage posed a complex challenge for Alcoa, leading it to shut down two very different production lines at once.
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