Alcoa at Wolfe Research Conference: Tariff Challenges and Strategic Opportunities

On Tuesday, 17 June 2025, Alcoa Corp (NYSE:AA) participated in the Wolfe Research 2nd Annual Materials of the Future Conference. During the event, CFO Molly Bierman discussed the company’s strategic maneuvers amid evolving market conditions. The conversation highlighted the dual impact of increased tariffs on Canadian aluminum imports and Alcoa’s proactive measures to mitigate these costs. While the company faces challenges from tariffs and lower alumina prices, it remains optimistic about future growth opportunities, particularly in the U.S. and emerging markets.

Key Takeaways

• Alcoa mitigated a potential $30 million tariff increase to $10 million by redirecting Canadian metal exports.
• The San Ciprian smelter’s restart is paused due to a power outage, pending government investigation.
• Alcoa’s net debt target is $1 billion to $1.5 billion, down from $2.1 billion at the end of Q1.
• The company is exploring growth opportunities in India and Southeast Asia amid slowing Chinese demand.
• Alcoa is actively seeking tariff relief and willing to invest in U.S. operations.

Financial Results

• Tariffs: Alcoa managed to reduce the anticipated $30 million tariff cost increase to $10 million for Q2 by redirecting shipments. The company saw a 5% shift in shipments to duty-unpaid Midwest premiums.
• Aluminum Segment: The benefit from lower API was trimmed to $140 million from previous guidance of $165 million.
• Tax: A neutral tax provision is expected for Q2, balancing Q1 tax benefits and expenses.
• Interest Expense: Alcoa faced a $15 million impact from unfavorable value-add tax assessments.
• Net Debt: With an adjusted net debt target of $1 billion to $1.5 billion, Alcoa is on track to reduce from $2.1 billion.

Operational Updates

• Tariffs: The Midwest premium rose sharply following the tariff increase, benefiting U.S. smelters but challenging Canadian production.
• Spain: The San Ciprian smelter restart is paused due to a power outage. Alcoa awaits grid stability assurances before proceeding.
• China and India: While Chinese demand has slowed, India is experiencing a 7% CAGR in primary aluminum demand through 2029.
• Transformation Portfolio: Alcoa is considering selling idled assets for data center use and other opportunities.
• Australia: A new mine region approval process is underway, potentially increasing aluminum production by 1 million tons by 2029.

Future Outlook

• U.S. Investments: Alcoa is willing to invest in U.S. operations if tariff relief is granted, though new developments require economic power agreements.
• Growth Opportunities: The company is actively pursuing expansion opportunities as it approaches its net debt target.
• Spain and Australia: Alcoa sees potential profitability for the San Ciprian smelter and cost improvements from Australian mine moves.

Q&A Highlights

• Pension: Alcoa has managed pension obligations through consistent paydowns and annuitization.
• Tariffs: The company is engaging with the U.S. administration to advocate for tariff-free Canadian metal flow.
• Hedging: Alcoa has limited ability to hedge against market volatility.

Readers are encouraged to refer to the full transcript for a more detailed account of the conference call discussions.

Full transcript - Wolfe Research 2nd Annual Materials of the Future Conference:

Timna, Host, Wolf Materials of the Future Conference: Okay. Welcome, everyone. Thank you so much for joining us. This is the Wolf Materials of the Future Conference.

We are hosting Alcoa, we’ve got CFO Molly Bierman with us. Delighted to have Alcoa join us. A lot to talk about. And we’re just going to kick off with a bit of a discussion about kind of where we sit in terms of aluminum aluminum markets and anything you want to provide for us in terms of thoughts on this second quarter that we’re wrapping up. Thanks again.

Molly Bierman, CFO, Alcoa: Thanks, Timna, and welcome everyone. Thanks for joining us. Couple comments on, aluminum, definitely the material of the future, very exciting for us. Aluminum part of our everyday lives in our cars, our homes, our offices, part of most industrial processes and products, packages, the things that we consume and use. Definitely a long term good growth prospects related to the low carbon, transition, preferred in renewable energy infrastructure, solar panels, wind turbines, transmission, electric vehicles.

So great long term prospects. We believe quite strongly in this in Illumina. We feel like we have a great product. We have capabilities and strength in our assets to deliver for our shareholders. If you look at the second half of the year or the first half of the year, very busy.

Tariffs have dominated, as your research paper mentioned, the discussion. First, we had the 25% tariff, the loss of the Canadian exemption on Section two thirty two, and now the movement to the 50% tariff. Alcoa is watching this carefully, looking at how it’s impacting the broader aluminum industry, its impact on the Midwest premium, supply demand, as well as, the LME price. So far, we’re seeing no evidence of demand destruction, but watching carefully for that. I do have a bit of updates on second quarter, if I could take a moment to go through those.

So, so far in the second quarter, we’ve done a very good job to hold performance to our earlier guidance, the exception being the tariff impacts. We managed to limit a potential $30,000,000 tariff cost increase related to the 25% to 50% rate change to only 10,000,000, and that was by taking commercial actions to redirect our Canadian produced metal to customers outside The US. That does decrease revenue as more tons are in the lower Midwest duty unpaid premium, but it preserves more margin. For the second quarter only, reflect 40% of shipments on duty paid Midwest premium and 20% on duty unpaid. That’s a 5% swing from our existing guidance.

Two changes in guidance related to the higher API today versus the API in mid April when we guided. First, the aluminum segment’s benefit from the lower API is trimmed to $140,000,000 from the prior guidance of $165,000,000 Second, with improved projected annual earnings at current prices, the tax benefit that we had expected in the second quarter is eliminated. The tax provision for the second quarter will approximate zero with the first quarter catch up tax benefit and second quarter tax expense nearly offsetting. Lastly, on interest expense, we expect an unfavorable impact of about $15,000,000 related to recent unfavorable value add tax assessments.

Timna, Host, Wolf Materials of the Future Conference: So to summarize, the impact of tariffs could have been $30,000,000 It will be $10,000,000 in the quarter, and that’s the additional 25% to 50 that was announced May, right, at the famous Pittsburgh rally that we were talking about. And then the other component is the tax item that would have been a benefit and now be neutral or near zero tax. And then the other impact, I think we had done some of our own math in coming up with the alumina benefit from lower alumina prices mitigated in the aluminum segment. So just the one clarification question is, would you not see some more benefit in the alumina segment from that? Or is that You’ll

Molly Bierman, CFO, Alcoa: get that when you use our sensitivities. Yes. Absolutely have the benefits of a higher API.

Timna, Host, Wolf Materials of the Future Conference: So for those of us who have been following Alcoa for a while, for me it’s been fourteen years, Alcoa has done a lot to try to simplify its business. We talked about this and it’s been a focus. So MaDen is sold or is it sold?

Molly Bierman, CFO, Alcoa: About to close. About close. Right around the end of the quarter.

Timna, Host, Wolf Materials of the Future Conference: Okay, so almost sold. And then we can talk about that. And then the Alumina Limited JV is no longer, that partnership, so that’s 100% owned by Alcoa now. But unfortunately, exogenous items have made Alcoa maybe a bit more complicated. So can you, in your own words, just describe to us how to think about the impact of the tariffs on your Canadian operations and the offset on your U.

S. Operations? And then if we were to see any change, we can have some framework to think about what that will look like with tariffs.

Molly Bierman, CFO, Alcoa: Okay. So let’s start with the 50% tariff and that increase effective on June 4. So we did see the Midwest premium almost immediately rise to $0.68 per ton and that was over the May average, which was right around I said ton, but I meant pound. That was compared to the May average of $0.38 per pound. Since that time though, we’ve seen the Midwest premium decline.

It was $0.57 at the end of last week and now even lower today. If you look at Alcoa and our distribution, we have two smelters in The US producing about 290,000 tons, so they absolutely benefit from the higher Midwest premium. However, we have 960,000 metric tons of Canadian production, and about 70% of that is moving to U. S. Customers.

If the Midwest premium had reached $0.70 that actually would have been a good impact for Alcoa, a favorable impact, But with it being below 70%, not getting to the parity needed to incent import tons, it’s actually a negative to us. So we’re paying more in tariffs on our Canadian production than we’re earning on our US tons.

Timna, Host, Wolf Materials of the Future Conference: For now.

Molly Bierman, CFO, Alcoa: For now.

Timna, Host, Wolf Materials of the Future Conference: I think that’s the dynamic. Right? You have the Canadian tons that need to get to a certain threshold to break even to ship to The US and then The US tons that benefit from the higher Midwest premium. So that’s the math. And I’d like to hear in Alcoa’s words what outcome you would like with this current tariff environment.

So because The US is so net short aluminum, we do rely on a lot of Canadian tons, which Alcoa and others supply and other tons. So I guess it’d be helpful to just hear in in Alcoa’s words what what you’d like the outcome to be of the the current, tariff environment or or how to think about it.

Molly Bierman, CFO, Alcoa: So we’ve been having many discussions with the, US administration, and maybe the early conversations were more about education, trying to help them to see the differences between steel and aluminum, steel that has the domestic capacity available to ramp up. Aluminum, we’re 4,000,000 metric tons short, so that’s the value of our annual imports. Also talking to them about the tight integration between Canada and The US and the job dependencies between the regions. Also focusing on power. So the a new greenfield aluminum smelter might need 12 terawatts of electricity, and we would need that at a delivered price at under $40 per per megawatt hour to be economic.

So the the US administration was not necessarily understanding, these benefits or these sorry, these challenges until we started the discussions. Lately, our discussions with them have been more about the impact the negative impact from the tariffs on Alcoa, as I mentioned, as well as the broader issues on the industry, possible inflation and demand destruction. So those conversations are continuing. We’re working both sides of the border, talking to the Canadian government and the liaisons there, working with the aluminum associations in both The US and Canada, talking very closely with The U US Administration leaders, Trump’s direct reports, trying to make sure that we’re advocating for a position that will provide possibly a Canadian exemption or at least some level of Alcoa specific relief. We’re trying to impress upon them that we’re a US listed company headquartered in in The US.

We invented the aluminum industry way long ago, and we’re, in the best position to grow The US industry, which is both of our priorities, both the government and Alcoa’s.

Timna, Host, Wolf Materials of the Future Conference: So that’s going to lead to my next question. Is Alcoa prepared to respond with more production? And separately, do you think anyone will add capacity because of the tariffs? And then 45X in that mixture? I know that’s because those kind of go hand in hand.

Molly Bierman, CFO, Alcoa: So we’ve been talking to the administration. We are absolutely willing to invest in our current US operations in exchange for tariff relief. However, if you look at a greenfield development, you really have to have view to economic power and twenty, thirty year power contract. So we’ve been talking to them about the importance of an industrial energy policy that would support delivery of energy at again less than that 40,000 sorry, dollars 40 per megawatt hour. So those conversations continue.

Timna, Host, Wolf Materials of the Future Conference: Okay. But Alcoa not necessarily planning to build a 3,000,000,000 to $4,000,000,000 smelter that would take, what,

Molly Bierman, CFO, Alcoa: five to seven years?

Timna, Host, Wolf Materials of the Future Conference: Seven years. Century said they are looking into it, and EGA has said that they’re planning on one in Tulsa. Can you talk to those projects, or does that move the needle in terms of filling up the remaining demand that isn’t met by U. S. Production?

Molly Bierman, CFO, Alcoa: So both of those projects have not given the specifics on the energy contracts. So for us, that’s a key piece of information. I think they’re both planning around 600,000 to 750,000 metric tons, so that would still leave The U. S. Short on its at least 4,000,000 metric tons today and growing to over 5,000,000 metric tons in the projections through 02/1930.

Timna, Host, Wolf Materials of the Future Conference: And then we touched on I mentioned 45X. 45X is effectively a subsidy to aluminum smelters in The US, of which there are four left, right? So the latest Big Beautiful bill proposes to put a finish line expiration date on that. Can you comment on that as well?

Molly Bierman, CFO, Alcoa: So the House version of the big beautiful bill has a quicker phase out, so we would move to zero by 02/1932. The Senate version from yesterday is a little bit longer timeline, so it starts a year later and ends a year later, but we would be phasing out that benefit. That’s important for us now. We’re getting 50,000,000 to $60,000,000 a year in support under 45X. It’s 10% of operating costs exclusive of your raw material.

So it’s a it’s a big it’s a big item for us.

Timna, Host, Wolf Materials of the Future Conference: Great. And then before we leave The US, you mentioned that you haven’t seen any demand destruction, and I know that you just produce and aren’t necessarily in the weeds with the customer. But how concerning is demand destruction, do you think, with 50% tariffs?

Molly Bierman, CFO, Alcoa: I think it is concerning. What we’re seeing immediately now, and this shows up in our second quarter order book, which remains strong, are rolling and extruding customers are actually getting more orders from their customers because the end customers are preferring domestic supply during these periods of uncertainty. So initially, we’re not seeing the destruction. However, if it lasts longer, we do worry that inflation will work its way in. The producers will not be able to offset the higher costs at the 50% tariff level, and eventually that will result in higher prices to the end consumers.

Timna, Host, Wolf Materials of the Future Conference: Around the world with Alcoa, guess we’ll make a stop in Spain next. This is a hot topic for those of you close to Alcoa. Spain, San Ciprian had a big power outage. You shut operations. I believe you’re still shut.

Can you give us an update there and what you’re seeing, please?

Molly Bierman, CFO, Alcoa: So we had begun restart of the smelter there at the end or April, and we were only about 10%, resumed with the restart when the power outage hit Spain. So that completely brought down the the smelter. We saved only a handful of pots. The refinery went down as well, but it has fully recovered. We are not going to, resume the restart of the smelter until we get some answers from the government authorities on the root cause of the power outage as well as the corrections that are being put in place to make sure it does not recur, and as well as understanding what higher costs will come if they need to manage the grid differently, what that looks like, how much of that is going to get, passed on.

So we understand they did issue a report this morning from the government, have not had a chance to digest that yet, but we’ll do so. But as of now, we’re pausing the restart.

Timna, Host, Wolf Materials of the Future Conference: Should we stay in Spain or should we go to

Molly Bierman, CFO, Alcoa: Can I make one more? And Sean, I do want to say we did issue a force majeure to the Works Council notifying them that we will not meet the obligations under the viability agreement in relation to the 2025 run rate production.

Timna, Host, Wolf Materials of the Future Conference: So at today’s economics, with the LME price where it is, do you feel confident that Spain, under the right power agreement, can be profitable This is a location that’s been there for a long time. It has a lot of importance to the Spanish government, the region. How do you feel about it longer term?

Molly Bierman, CFO, Alcoa: So the smelter does our business case for the smelter does eventually get to profitability. We believe we’ll have two difficult years, a part of our recovery plan this year and next, but that did assume that we would get fully restarted by the end of this year. So we’ll relook at that with the changing story on power, but the smelter has the opportunity to be profitable. We have actually great assets there. The workforce, very knowledgeable, they’re experts, they really know how to run the operation well.

The refinery also has a great team, but there the economics are a bit more challenged. We’ve got the residue storage area that’s undergoing some CapEx to be able to fortify that and to maintain production, so but the smelter has has long term profitability prospects.

Timna, Host, Wolf Materials of the Future Conference: Your latest on China, actually. I know you don’t produce there, but I figured if we’re traveling around the world and China has talked about a cap at 45,000,000 tons annually. We’re hearing good things about demand. Just your latest on the Chinese market since it’s such an important part of the aluminum market.

Molly Bierman, CFO, Alcoa: So while Chinese demand has slowed, that was largely expected. And it’s not negative, it’s just slowed. But we’re seeing other areas like India and other developing Southeastern Asian nations pick up and cover for that. For example, in India, we’re seeing 7% CAGR primary aluminum demand growth through 2029. The you’re also seeing the Indonesian products come online.

And in the past, we maybe saw smelters coming up without regard to the economics. In Indonesia, we actually see them adjusting the project schedules to the economics. So it seems to be a very disciplined ramp up, and it does seem that it will be more in line with the growing demand.

Timna, Host, Wolf Materials of the Future Conference: Wanted to ask about the opportunity to sell idled assets to hyperscalers, etcetera. Any updates there or maybe an overview of what you have available?

Molly Bierman, CFO, Alcoa: We are entertaining conversations with hyperscalers now on our former smelter sites that have energy infrastructure remaining. You have to understand when you talk to the hyperscalers though, they’re casting their nets wide, so they’re talking to a lot of people. It doesn’t necessarily mean that we have a transaction that’s imminent. We will continue those discussions though. If you look at what we call our transformation portfolio, there’s 20 idled sites that are in various stages of remediation.

A handful of those would be valuable for data center use. Some of them have port access or own the ports or could be used for warehousing or other manufacturing capabilities. So we continue to market these. We have probably the most value resides within our Messina East curtailed smelter that could be valuable for a data center. We also see value in Point Comfort that has a port connected to it.

And also, we’re currently marketing the Point Henry former smelter site. That is primarily a land value that’s located on the coast of Australia near Geelong, so there’s value there as well. But nothing nothing imminent or to report today.

Timna, Host, Wolf Materials of the Future Conference: For reference, in 2021, you did two transactions, and I don’t wanna get the values wrong. I thought they’re about 100,000,000 each. Can you remind us what those were and if they’re comparable to any of these?

Molly Bierman, CFO, Alcoa: So Rockdale was actually $250,000,000 and that was why sometimes patience is a virtue. Our first offer for Rockdale was about $60,000,000 and we held out for three years and got the $2.50 And then we also monetized East Delco that was $100,000,000 Both of those were in 2021.

Timna, Host, Wolf Materials of the Future Conference: Assumably, there’s some inflation since then in these assets?

Molly Bierman, CFO, Alcoa: I hope so.

Timna, Host, Wolf Materials of the Future Conference: Okay. All right, great. I wanted to touch on the balance sheet. I think one thing that’s kind of lost on people maybe is that you don’t have the pension anymore. You’re not in the pension business.

And then you don’t have the cash flows going to Illumina Limited. Maaden is cleaned up almost. So can you give us a state of the balance sheet and how to think about cash uses going forward?

Molly Bierman, CFO, Alcoa: So we recently updated with a new adjusted net debt target at 1,000,000,000 to $1,500,000,000 If you look at the end of the first quarter, we were at $2,100,000,000 So we still have a bit of delevering to do. We would have expected to advance that through the rest of 2025. We paused for a little bit looking at what the tariffs and the uncertainty caused, but we hope that we’ll continue to delever through the end of the year. As we start to approach the high end of the net debt target, we will look at returns to shareholders, portfolio actions, as well as growth opportunities as a way to deploy any excess cash. Our balance sheet today really gives us a lot more flexibility than the balance sheet that we had at separation.

Remember, our adjusted net debt then was $3,800,000,000 We’ve done massive amounts of work on the pension that is now fully funded in The US. And our OPEB, while it’s still about 500,000,000, that’s a liability that’s declining. You don’t generally fund OPEB liabilities, but that’s about a $50,000,000 a year cash cost. So balance sheet’s in much better shape than we were several years ago.

Timna, Host, Wolf Materials of the Future Conference: And when you think about the math, do you include the Modern sale in the deleveraging? And does that not get you year end and close to that target?

Molly Bierman, CFO, Alcoa: The Modern, as I mentioned, is scheduled to close right about the end of quarter, but we have a three year lockup, so we can only monetize a third on the third, fourth and fifth anniversaries. Now as a part of that transaction, we have the ability to monetize or hedge the shares if we would need the cash or if we want to use the cash for a strategic opportunity. We’re not necessarily counting that in today’s view of our adjusted net debt position, but it’s certainly there available to us. Any action that we would take to hedge or monetize comes with a cost. We don’t really need the cash right now, but that is available to us if and when needed.

Timna, Host, Wolf Materials of the Future Conference: In the past two years, Alcoa has been putting out fires and and fixing. And and how do you think about the growth opportunities for Alcoa?

Molly Bierman, CFO, Alcoa: So we are we are positioning for growth, not only in our current portfolio. You saw last year, we funded a lot more return seeking. We have some very credible and viable CREEP projects, as well as we’re moving to add value add capacity specific to what customers need. So adding some capabilities to handle more recycled content primarily to address European need from the European autos. We also though look at, we look at other opportunities in the industry.

We do have our corp dev team is busy looking, Nothing to announce, but we’re we’re always open to the opportunities in the industry, but but nothing nothing more to announce today.

Timna, Host, Wolf Materials of the Future Conference: I could keep going, but I’m gonna open it up to people on the floor if they wanna ask some questions.

Unidentified speaker: You may not want to talk about it, but what was the resolution of the pension issue? How did you deal with that? What was the mechanic of it? I mean, you look at things like Eastman Kodak and whatever, which had an overfunded pension fund if such a thing is possible. But I’m just curious to know what what measures were taken to reconcile that because I think that’s gonna be an exercise that a lot of people are going to be looking at going forward.

Molly Bierman, CFO, Alcoa: To deal with our pension, it was many years of chipping away at it. So we kept every time we had excess cash paying down. We also did some debt to lower the pension. As we’ve been able to get the pension under control, we have passed a lot of it to insurance companies to annuitize. So it’s been a whole series of actions over time to deal with the pension.

In both The US pension, and then we’ve also taken care of the majority of exposure on the Canadian pension as well.

Timna, Host, Wolf Materials of the Future Conference: Alright. I was hoping someone else would ask this one, but I will ask it. How can you characterize your conversations with the Trump administration? Everybody wants to know your level of confidence in any carve out. So what what can you tell us?

Molly Bierman, CFO, Alcoa: It’s hard it’s hard to speculate on that, Timna. We are actively engaged in conversations. As a matter of fact, Bill was in Canada last week working with big representatives on that side of the border. He actually had a follow-up call with Secretary Lutnick last night. So we are very actively engaged with the administration.

We’re not gonna make predictions on on when this this will be resolved, but we stress to them the importance of that free flow of Canadian metal into The US to serve The US industries. The auto, the aero, defense are all depending on that supply. There’s a lot of job dependencies, a focus on that, and we need the tariff tariff free flow.

Timna, Host, Wolf Materials of the Future Conference: The demand side, and I don’t think the Trump administration necessarily wants high aluminum prices. I mean, do you think that it’s the education efforts are being heard? Because you said it started out education on the industry. Do do you think that that’s been fruitful?

Molly Bierman, CFO, Alcoa: I do think they expected some level of price support that would incent us to develop our own industries. And that, I think, was the initial hope with the tariffs. We’ve been spending time showing them, though in our case, it’s actually hurting because of our Canadian volume. So there’s just not too much more to add on that one.

Timna, Host, Wolf Materials of the Future Conference: Okay. Any other questions from the audience? Okay. I can ask, a few more. So in your mind, what I mean, you get a lot of questions on tariffs.

You get a lot of questions on Spain. But what do you think people aren’t talking about? What’s the opportunity at Alcoa? Is it, like, aluminum demand? Is it growth?

Is there is there something that you think people are really missing? Because I I’m sure you don’t wanna just be talking about tariffs in every meeting.

Molly Bierman, CFO, Alcoa: I do want us to be appreciated now, the stable production of our operations. If you look back in time, it almost seemed like we always had some issues. We have been producing stably for many quarters now consecutively, hitting record production, hitting our productivity goals. Last year, we had the six forty five million productivity program, we over delivered on that. In the areas that we didn’t meet, we baked that into the 25 plan and we’re on target to deliver.

So I hope that our shareholders and interested parties see that we’re producing stably, we keep our promises on safety, and continue to focus on productivity as well.

Timna, Host, Wolf Materials of the Future Conference: In Australia, there’s been some noise in the past and some government relations that weren’t ideal, but it seems like things are improving there. Can you give us an update on the dynamic in Australia? You did shut a refinery a while ago, but also seems like you’re on track to get to the better quality bauxite by 2027. Any update or concerns there?

Molly Bierman, CFO, Alcoa: We are progressing right now with our approval for our new mine region. Right now, it is in public comment period. That’s with Western Australia EPA. Started that in May. It’ll last until about the August.

This allows the community members to weigh in on our long term mine plan so that they can see our full plan for the development of the mine as well as the eventual closure. That’s on track. During the comment period, we don’t get to see the comments that come in, but at the end of the process, the EPA will summarize those, they’ll give them back to us, we’ll have a period to comment on those. Once the EPA is satisfied that we’ve responded fully, they will make those public. They’ll post them on their website.

From there, they’ll issue their reports. We, along with the EPA, are driving toward early twenty twenty six for official, approval. That allows us then to do our mine move. It’ll take eighteen to twenty four months. We’ll move into the new mine region no earlier than 2027.

That’ll take a period of phase in, but by 2029, we should be fully into the new mine region. And at that point, we’ll pick up about a million tons additional aluminum production as well as have a 15 to $20 per alumina ton cost improvement. So very notable financial improvements when we complete, get the mine approvals and complete the mine moves.

Timna, Host, Wolf Materials of the Future Conference: Also, any updates? I think people were concerned about Guinea given some of the politics there. How’s the Alomar ramp up in Brazil? Any updates in those regions?

Molly Bierman, CFO, Alcoa: So on Guinea, we have a great relationship with the minister of mines. Unlike some of our peers, we never promised to build a refinery as a condition of our of our mining license. I say we, but I’m representing Alcoa’s interest in the CBG joint venture. So we have to every five years make a proof on the economics of a refinery, but we haven’t committed to date to building the refinery. So we still have our free flow of bauxite out of Guinea to our customers.

On the Aligomar smelter ramp up in Brazil, that continues. We are nearing into we’re in the low nineties of capacity, so nearing the end, but that has been progressing well.

Timna, Host, Wolf Materials of the Future Conference: I have one more question, and then we can wrap up if if we don’t have any other questions. Is it possible to hedge the Midwest premium? Is it possible to because obviously so much of your profitability right now kind of depends on that random number that moves around so much from week well, at least in the last week, it’s moved a lot. Like, do you have any repercussions? How does your commercial team manage this kind of volatility if it’s so critical?

Molly Bierman, CFO, Alcoa: Yeah. So there really isn’t an opportunity to hedge the Midwest, but we do with what we call our open volumes. So our volumes that aren’t under annual contracts. About 90% of our volumes are on annual contracts. But with the 10% that’s left, we do run commercial team is looking at every positioning, where can we have the best margin, so they have their netback calculator, looking at the premiums, the cost of freight, the financing cost, and determining the best place to ship the metal.

And we did in the second quarter, we ended up redirecting metal that we typically would have sent into The US on spot trades. We ended up keeping it in Canada because the it was a better financial outcome. And that helped us to reduce some of our tariff costs in the second quarter.

Timna, Host, Wolf Materials of the Future Conference: I think we can wrap up there. Thank you so much for your time. Appreciate it.

This article was generated with the support of AI and reviewed by an editor. For more information see our T&C.