Alcoa sees output costs easing as aluminium demand stays steady

Alcoa reiterated its outlook for 2023 aluminium shipments at between 2.5 million and 2.6 million tons.

Alcoa Corp. said lower prices for its metal-making ingredients will help to lower production costs in the second quarter as aluminium demand stays robust.

Earnings will get a boost in the second quarter from “favourable raw materials, volume and lower production costs,” the Pittsburgh-based company said in a statement on April 19.

Alcoa reiterated its outlook for 2023 aluminium shipments at between 2.5 million and 2.6 million tons.

Aluminium prices are up just over 2 percent in 2023 as demand for the lightweight metal remained steady in the face of headwinds including higher borrowing rates, fears of China’s slow return from COVID-19 lockdowns and growing concerns that economic activity could slow in the United States.

Analysts at Citigroup Inc. have said they expect strong aluminium prices of as high as $3,000 a ton by year end, or roughly 20 percent higher than current levels.

In the first quarter, Alcoa posted an unexpected adjusted loss of 23 cents per share. Analysts had expected a profit of 3.1 cents per share.