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| Alcoa aluminum |
Alcoa’s Aluminium Output Growth Amid Operational Challenges
Alcoa increased its aluminium production by 5.3% year-on-year in Q2 2025, reaching 572,000 tonnes. This growth primarily resulted from the ramp-up of the 447,000 t/yr Alumar smelter in Brazil, operated jointly with South32. However, production at the San Ciprián smelter in Spain declined due to a major power outage causing a pause since April 2025. Despite this, Alcoa reaffirmed its 2025 aluminium production guidance between 2.3 million and 2.5 million tonnes. The company’s aluminium shipments fell by 6.5% year-on-year, influenced by the San Ciprián shutdown and redirected exports due to US tariff pressures, which are expected to cost $90 million in Q3.
Decline in Bauxite and Alumina Production and Strategic Adjustments
In contrast, Alcoa’s bauxite and alumina production fell in Q2 2025, with bauxite output down 2.1% to 9.3 million tonnes and alumina down 7.4% to 2.4 million tonnes. The closure of the 2.2 million t/yr Kwinana alumina refinery in late 2024 contributed to this decline. Despite the production drop, Alcoa maintained its alumina production guidance for 2025 at 9.5 to 9.7 million tonnes. The company reduced produced alumina shipments but compensated with third-party sales to meet contractual obligations, indicating strategic flexibility amid operational constraints.
Tariff Impacts and Market Outlook for Aluminium and Scrap
Alcoa, like its peer Rio Tinto, faced significant tariff burdens on aluminium shipments to the US, with Rio Tinto paying $712 per tonne in Q2 2025. These tariffs pressured global trade flows and led Alcoa to divert Canadian aluminium exports away from the US market. This tariff environment may suppress scrap aluminium demand and influence raw material sourcing decisions in 2025. Nevertheless, Alcoa plans a full restart of the San Ciprián plant by mid-2026, supported by Ignis Equity Holdings, which could stabilize future aluminium output and benefit scrap metal recyclers dependent on stable primary aluminium supply.
ScrapInsight Commentary
Alcoa’s aluminium output growth offsets bauxite and alumina declines but faces tariff headwinds affecting shipments and scrap demand. The San Ciprián restart by 2026 is critical for market stability. Tariff-induced trade shifts may reshape aluminium scrap supply chains and pricing in North America.
