Alcoa will idle the remaining 230,000 mt of capacity at its Intalco aluminum smelter in Ferndale, Washington, as part a previously announced portfolio review, the company said Wednesday.
"While our employees have worked diligently to improve the facility, the smelter is uncompetitive, and current market conditions have exacerbated the facility's challenges," Alcoa CEO Roy Harvey said in a statement. "This is difficult because of the impact on our employees, and we will ensure appropriate support as we work to safely curtail the facility."
Alcoa said the move will bring the company's total curtailed smelting capacity to 880,000 mt, representing about 30% of its total global smelting capacity.
The full curtailment of the smelter, which recorded a net loss of $24 million in the first quarter, will be completed by the end of July, Alcoa said. The smelter has a nameplate annual capacity of 279,000 mt, though the company had previously curtailed about 49,000 mt of that capacity.
The Intalco smelter is one of seven remaining smelters still operating in the United States.
Alcoa said it will record estimated restructuring charges of approximately $25 million associated with the curtailment in the second quarter, including employee-related costs and contract termination costs.
Due to the planned curtailment at Intalco, Alcoa lowered its annual aluminum shipment guidance to between 2.9 million mt and 3 million mt from its earlier outlook of between 3 million mt and 3.1 million mt.
Alcoa's primary aluminum production rose 5% year on year to 564,000 mt in Q1, despite unfavorable market conditions caused by the coronavirus pandemic.
The Pittsburgh-based aluminum producer posted a net income of $80 million on sales of $2.4 billion in Q1, compared with a $199 million net loss on sales of $2.7 billion in Q1 2019.
Source: Platts |
