Alcoa Sees Aluminum Deficit, Strong Demand and Tariff Upside at Jefferies Conference

Alcoa’s CFO Molly Beerman said the aluminum producer is carrying momentum from the second quarter into the third quarter, supported by strong production, pricing realization and demand from customers in North America and Europe.

Speaking at the Jefferies Global Industrials Conference 2026, Beerman said Alcoa set production records at five operations during the second quarter and continued that performance into the third quarter. She said the company’s customers have sought regionally located supply amid uncertainty surrounding Middle Eastern production.

Beerman said the alumina market remains in surplus despite a recent price rebound to approximately $350. She cited disruption at Alunorte, the approaching October 2026 curtailment at Yarwun, and expectations that Middle Eastern smelters will consume more alumina as factors influencing market sentiment. However, she said alumina is expected to remain oversupplied through the remainder of 2026 and likely into 2027, until Indonesian smelters begin operating and increase their consumption of alumina.

In aluminum, Alcoa continues to see a global deficit outside China, according to Beerman. China is largely self-sufficient, she said, and its exports are not material to the broader global market. North America and Europe have the largest deficits, she added.

Alcoa’s value-add product order book is nearly sold out for the rest of 2026, Beerman said, as the company enters the 2027 contracting season with an opportunity to secure favorable premiums.

Beerman said Alcoa is positioned to benefit under a range of potential trade-policy outcomes. The company has 900,000 Canadian tons, with most shipped into the United States. At current 50% tariff levels, Alcoa is paying more than $1 billion in tariffs, although the Midwest premium is compensating the company for those costs and providing margin because of tight metal availability, she said. If Canada received a favorable tariff rate, cutting the tariff burden in half could provide a significant benefit, Beerman said. A quota system could also be favorable to the company. She noted that the U.S. needs to import roughly 4 million metric tons of aluminum supply, while Canada can supply only about 3 million metric tons. If additional trading partners received tariff relief to cover the remaining imports, the Midwest premium could decline, but Beerman said she does not expect it to return to pre-tariff levels because the U.S. would still need to encourage imports.

Beerman discussed Alcoa’s proposed acquisition of South32’s bauxite, alumina and aluminum assets, referred to by the company as the AliGroup transaction. The deal, Alcoa’s largest acquisition, is expected to close in the second half of 2027. The assets include a mine and refinery in Western Australia, South32’s minority interest in the Alumar smelter and refinery in Brazil, and the Hillside Aluminium operation in South Africa. Beerman said the assets are familiar to Alcoa, are positioned slightly better on the cost curve than the company’s existing portfolio and are expected to provide additional scale and financial flexibility. Alcoa expects approximately $900 million in net present value synergies from the transaction. The company expects to capture an initial $50 million annually from procurement, logistics and commercial benefits within 12 months of closing. Further synergies a...