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EuroWire – March 2009
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will be cut in half, to $1.8 billion this year. New York-based
Alcoa said it would take charges of as much as $950 million
for the restructuring and dismissals, which total 13% of its
global workforce. The dismissals include 2,600 employees and
contractors working in plants producing primary metal and
alumina, the material refined from bauxite and smelted to make
refined aluminium.
The latest reduction of 135,000 metric tons brings the total of
Alcoa’s recently announced output cuts to 750,000 tons, or 18%
of smelting capacity. The company said the cuts in primary metal
production, to be completed by the end of the first quarter,
include all smelting operations in Tennessee. According to the
Alcoa website, the Tennessee smelting plant can produce 1.3
million pounds of metal a day at full capacity, for an annual yield
of 215,000 tons.
Last fall, Alcoa announced plans to halt remaining production at
a smelter in Rockdale, Texas, eliminating 150,000 tons of annual
capacity.
As noted by Rob Delaney of Bloomberg News, (7
th
January),
Alcoa and its competitors are facing losses as manufacturers
contend with a drop in demand for appliances, autos, and other
products made with the lightweight metal. He wrote, “Alcoa’s
shares declined 69% last year as aluminium on the London Metal
Exchange fell 36% and LME-monitored inventories more than
doubled to a 14-year high.”
Elsewhere in metals . . .
❈
Customers of AK Steel were advised that a surcharge
of $165 per ton would be added to invoices for the company’s
electrical steel products shipped in February. The surcharge
on the speciality steel, used mainly in the automotive and
construction industries, was based on December 2008 prices for
raw materials and energy.
As reported by Ruthie Ackerman of Forbes (5
th
January), the
West Chester, Ohio producer was passing along its rising raw
material costs just as demand appeared to be rebounding. AK
Steel had been forced to temporarily idle its Ashland Works
mill in November because of declining orders from automobile
factories.
One analyst attributed the pickup in demand from the lows
of November and December to inventory destocking. While
commodity prices in general moved lower in the fourth quarter
of last year, another analyst told Forbes that costs of the raw
materials of electrical steel production (silicon, iron ore, scrap)
have risen.
Seattle, the home of Microsoft, is now
the #1 wired city in the US
Since 2007, Forbes has measured the wired quotient of
American cities by computing the percentage of Internet users
with high-speed connections and the number of companies
providing high-speed Internet. Since many urban residents
Telecom