Alcoa Maintains 2024 Guidance as Third-Quarter Production and Revenue Climb

Alcoa

Alcoa Corporation, a leading U.S.-based integrated aluminum producer, upheld its 2024 production guidance for alumina and aluminum despite achieving increased quarterly production and revenue in Q3. The company continues to project aluminum production at 2.2-2.3 million metric tonnes (t) and alumina output at 9.8-10 million t, unchanged from prior estimates.

Third-Quarter Highlights

Aluminum production grew 5% year-over-year, reaching 559,000 t in Q3 2024 compared to 532,000 t in the same period last year. Aluminum shipments also rose slightly to 638,000 t from 630,000 t. Meanwhile, bauxite production declined to 9.4 million dry metric tonnes (dmt) from 10.7 million dmt a year ago. Alumina output decreased to 2.435 million t, down from 2.805 million t, with shipments falling to 2.052 million t.

Revenue and Market Dynamics

Alcoa’s Q3 revenue rose nearly 12% year-over-year to $2.9 billion, driven by higher alumina prices, which averaged $485/t compared to $354/t in Q3 2023. Aluminum prices also increased to $2,877/t, up from $2,647/t a year earlier. Third-party aluminum sales rose approximately 10% to $1.8 billion. Improved alumina pricing and lower raw material costs helped narrow segment losses to $11 million from $15 million in the same period last year.

The company posted $90 million in profits, a significant improvement from the $168 million loss reported in Q3 2023.

Strategic Developments

Alcoa raised its annual shipment forecast by 200,000 t to 12.9-13.1 million t, reflecting increased trading volumes. However, a wider spread between production and shipments emerged due to external sourcing of alumina amid the ongoing curtailment of the Kwinana refinery in Australia.

Alcoa is advancing a strategic partnership with IGNIS, a Spanish renewable energy investment firm. The agreement includes selling 25% of Alcoa's operations in Spain and a potential €175 million ($189 million) investment by Alcoa if required. The deal is contingent on government and employee support.

On 15 October, Alcoa signed a long-term supply agreement with Aluminum Bahrain (Alba) to deliver 1.5 million t of smelter-grade alumina over 10 years beginning in 2026, bolstering its position as a global alumina supplier.

Outlook

With strong alumina prices and strategic partnerships, Alcoa expects its alumina segment performance to improve by $30 million, driven by increased shipments and reduced production costs. As global aluminum demand remains steady, Alcoa’s ability to adapt through cost efficiency and partnerships positions it favorably for future growth.