Alcoa on Friday said it would cut 147,000 metric tons of its
smelting capacity in Brazil, citing "challenging" conditions in the
market and cost increases.
The move comes as the aluminum industry at large cuts production
as prices fall. Earlier Friday, United Co. Rusal PLC, the world's
biggest aluminum producer, halted plans for a smelter in
Siberia.
Alcoa, likewise, said earlier this year that it would close
several Australian plants.
Regarding its Brazil operations, Alcoa said Friday that the
remaining 62,000 metric tons of capacity at the company's smelter
in Pocos will be curtailed, resulting in a production decrease at
the location's refinery. Last year, Alcoa cut 34,000 metric tons of
capacity at the Pocos smelter.
Alcoa said it expects to curtail 85,000 metric tons of capacity
at its Sao Luis smelter, a year after it cut 97,000 metric tons
there. The Sao Luis refinery won't be affected, nor will other
locations in Brazil, Alcoa said.
Alcoa said it expects to finish the Brazil curtailments by the
end of May.
The company put 460,000 metric tons of smelting capacity under
review in May. With Friday's moves, Alcoa will have reduced
capacity by 21%, or 800,000 metric tons.
Alcoa said it expects to record charges related to the Brazil
changes of between $40 million to $50 million, or four cents to
five cents a share, during the first quarter.
Write to Michael Calia at michael.calia@wsj.com
Subscribe to WSJ: http://online.wsj.com?mod=djnwires