$90m tariffs from importing Alcoa’s Canadian smelters aluminium
The HQ-ed Alcoa is expecting costs of up to $90 million this quarter as a result of President Trump’s tariffs. Alcoa said it anticipates the costs as a result of importing aluminium from its smelters in neighbouring Canada.
Its CEO William Oplinger said approximately 70% of the company’s aluminium produced in Canada is imported into the US, which is subject to a 25% tariff cost.
This equates to between $400 million and $425 million a year, he told investors.
A higher Midwest premium should help offset most of those cost pressures in support of Alcoa’s domestic smelters.
But Oplinger warned the company still faces a $100 million impact on its business in 2025 because of the higher Section 232 duties that President Trump implemented on March 12.
He said the US does not have the necessary domestic smelter capacity to meet current requirements.
Even if all idled US smelting capacity was restarted, there would still be a 3.6 million tonnes shortfall of capacity a year. He estimated it would take five or six new smelters to meet current US demand for primary aluminium.
“These new smelters would require additional energy production equivalent to almost seven new nuclear reactors or more than 10 Hoover dams.”
In its latest financial report the company said production in the first quarter of the year decreased 1% sequentially to 564,000 metric tons. This was primarily due to two fewer days in the period, and also partially offset by continued progress on its Alumar, Brazil smelter restart.
