Alcoa Sees Steady Growth as Alumina and Aluminum Production Climb in Q3

Alcoa

Alcoa Corporation, a leading global aluminum producer, maintained its 2024 production guidance while reporting strong results for the third quarter. Despite challenges in alumina production, rising aluminum prices and strategic agreements have bolstered the company's financial performance.

Production and Shipment Updates

Alcoa's aluminum production grew 5% year-on-year, reaching 559,000 t in Q3 2024 compared to 532,000 t last year. Shipments rose slightly to 638,000 t, reflecting the company’s commitment to meeting global demand. However, alumina production declined to 2.435 million t from 2.805 million t, attributed to external sourcing challenges linked to the Kwinana refinery in Australia. Alumina shipments also fell to 2.052 million t from 2.374 million t, although the company revised its shipment forecast upward by 200,000 t to 12.9-13.1 million t.

Financial Highlights

Alcoa’s Q3 revenue increased 12% year-over-year to $2.9 billion, with higher alumina prices contributing significantly. Alumina prices averaged $485/t, a sharp rise from $354/t in the previous year. Meanwhile, aluminum prices rose to $2,877/t, up from $2,647/t, boosting aluminum sales by approximately 10% to $1.8 billion.

The company reported $90 million in profits, a substantial recovery from the $168 million loss in Q3 2023. Cost efficiencies and improved pricing dynamics across alumina and aluminum segments were key drivers of this turnaround.

Strategic Agreements and Partnerships

Alcoa continues to strengthen its global footprint through new agreements. In October, the company signed a 10-year deal with Aluminum Bahrain (Alba) to supply 1.5 million t of smelter-grade alumina starting in 2026. Additionally, Alcoa is exploring a partnership with IGNIS, a Spanish renewable energy investment firm. As part of this potential agreement, Alcoa would sell 25% of its Spanish operations while committing to a €175 million ($189 million) investment if necessary.

Market Outlook

With growing demand for alumina and rising aluminum prices, Alcoa is well-positioned to capitalize on global market trends. The company projects a $30 million improvement in its alumina segment, driven by cost reductions and increased shipments. Strategic initiatives such as the IGNIS partnership and Alba supply deal reinforce Alcoa's adaptability and resilience in a competitive market.