EoW March 2009

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 ❈ 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. doubled to a 14-year high.” Elsewhere in metals . . .

Telecom

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

39

EuroWire – March 2009