Alcoa will begin the curtailments before the end of the year and will complete them by the end of the first quarter of 2016. Alcoa’s decision to eliminate 503,000 metric tons of smelting capacity accounts for about 31 percent of the United States’s total for primary aluminum, but less than 1 percent of the global total, according to Harbor.
Copper demand has picked up in China recently but it’s unlikely to last and low prices have forced Alcoa to shut down three U.S. smelters, the aluminum giant said.
Aluminum is down 19 percent this year to $1,501 a metric on the London Metal Exchange, the benchmark bourse.
Alcoa chief executive Klaus Kleinfeld said the group had consistently taken decisive actions to create a commodity business that is positioned to succeed throughout the cycle.
Including today’s announcement, it has closed, divested or curtailed 45 per cent of total smelting operating capacity since 2007.
Alcoa said Monday that “these hard, but necessary measures will further strengthen our Upstream portfolio, reducing our cost position and driving greater resilience as we prepare to launch this business as a strong stand-alone company”.
In more bad economic news for Upstate New York, the once-largest industrial employer north of Syracuse, Alcoa, announced Monday afternoon it would idle one Massena smelting plant and permanently close another, according to various area news outlets. The casthouses at Intalco and Massena West, which produce value-add shaped products, will continue to operate. It is idling two smelters in Washington state.
The company in a news release said that 487 employees will be affected.
Alcoa expects fourth-quarter restructuring charges of $160 million to $180 million after tax, or 12 cents to 14 cents a share.
Alcoa makes lightweight metals technology, engineering, and manufactures.