Alcoa Corp. Earnings Take a Hit from Drastic Fall in Alumina and Aluminum Prices

SEATTLE (Scrap Monster): Alcoa Corporation- the global leader in bauxite, alumina and aluminum products reported net loss of $199 million in the first quarter of 2019. This compares with the net income of $51 million during the fourth quarter of 2018. The revenues reported a sequential decline of 19%, primarily on account of lower alumina and aluminum prices. The company reported adjusted net loss of $43 million, excluding special items.

Commenting on the result, Roy Harvey, President and Chief Executive Officer said that the company witnessed improvement in operations in Q1 2019, amidst weak alumina and aluminum prices. The bauxite and alumina segments reported increased production rates, he said. Alcoa will continue to restructure its aluminum portfolio through strategic actions, aimed at strengthening the long-term position of the company.

Alcoa reaffirmed prior full-year estimates. The yearly bauxite shipments are expected to total between 47.0 and 48.0 million dry metric tons. The alumina shipments are projected to be around 13.6-13.7 million metric tons. The total aluminum shipments are estimated to total around 2.8 and 2.9 million metric tons.

The company lowered its estimate of global aluminum deficit for 2019 to between 1.5 million and 1.9 million metric tons. The global aluminum demand is estimated to grow between 2% to 3%. The Chinese market is expected to remain balanced, whereas the rest of the world is expected to witness a deficit between 1.7 million and 1.9 million metric tons. Further, the company maintained surplus market for alumina and a slightly higher surplus market for bauxite in 2019.