Alcoa’s strategic approach brings success in aluminium production

Alcoa reports a good performance in the upstream sector as well with strategic planning. They have cut down their production by 28 percent or 1.2 million metric tons since 2007 to increase the competition in the global aluminium market.

In the third quarter, the company has successfully closed the 190,000 metric ton smelter in Point Henry and announced its plans to permanently close the Portovesme smelter in Italy which will bring the total capacity reduction to 150,000 metric tons. In exchange, Alcoa has entered into an agreement with Sural Laminated Products of Canada Inc. for the acquirement of Bécancour, Quebec rod mill worth 90,000 metric tons.

The third quarter ATOI was $245 million which is up by $148 million when compared to the previous quarter and further leap of $237 million when compared to the same quarter last year. $2,538 was the third part realized price for the third quarter this year which 11 percent higher than last quarter and 16 percent higher YOY. The increase can be attributed to lower alumina costs, the Saudi Arabia smelter upgrade, increased productivity, increased power sales, realized prices and favorable exchange rates.

Results were partially offset by charges related to previously announced smelter closures in Italy and Australia and seasonally higher power costs. Adjusted EBITDA per metric ton was $612, $275 per metric ton higher than second quarter 2014.