Alcoa Corp expects shipments from its Pinjarra alumina refinery in Australia to fall by around 120,000 metric tons in the second quarter compared to the first quarter due to the impact of Cyclone Narelle, its chief financial officer said.
The cyclone, which hit Australia in March, disrupted LNG supply to the 4.7 million ton per year capacity Pinjarra plant and increased second-quarter production costs by $30 million, Molly Beerman told the Wells Fargo Industrials & Materials Conference in Chicago on Wednesday.
Alcoa is also expecting additional fuel costs of $15 million in the quarter at its Sao Luis alumina refinery in Brazil due to the conflict in the Middle East, Beerman said.
Sao Luis remains profitable, but Alcoa’s alumina business is “very pressured right now” and the refineries in Western Australia are “really challenged” due to low alumina prices and poor-quality bauxite. “So the segment as a whole will be under water,” she said.
Alcoa is helping its aluminum smelter customers in the Middle East redirect some of their contracted alumina cargoes, primarily to China, because of their war-driven production constraints, Beerman said.
Alcoa’s shares plunged 9.5% on Wednesday to $65.55.
(By Tom Daly; Editing by Jan Harvey)
