Alcoa plans to sell as much as $1 billion in assets. It might close facilities over the next few years because it grapples with slowing economic growth that has driven aluminum costs lower, damaging its financial performance.
The Pittsburgh-based manufacturer mentioned Wednesday it had launched a review of the company meant to cut expenses and level it towards sustainable profits.
The company mentioned it might try to sell what it has known as noncore assets following the next year to 18 months, taking in within $500 million and $1 billion in proceeds.
Over five years, Alcoa plans to consider a range of additional asset sales and closures of facilities, in addition to curtailing production at other sites. It stated it might evaluate 1.5 million metric tons of smelting capacity as well as 4 million metric tons of alumina-refining capacity.
The company has been hurt by fears that a weaker global economy will reduce into demand for its products and crimp costs for metals. On Tuesday, the International Monetary Fund stated it expects the development of 3 % this year, lower than its forecast from July and off close to 1%point compared with 2017.
Global demand for aluminum in 2019 might be weaker than Alcoa previously anticipated, the company additionally mentioned Wednesday. The aluminum manufacturer now believes global aluminum demand will rise not more than 0.4 % this year; however, it might fall as much as 0.6 %. Earlier, it mentioned it believed demand for the metal would rise between 1.3 % and 2.3 % this year.
The company mentioned in a statement that the change is driven by weakening macroeconomic conditions and trade tensions within the U.S. and China and contracting manufacturing activity, particularly within the global automotive sector.
Quarterly revenue at Alcoa declined 24 % from a year earlier to $2.57 billion as aluminum costs declined. Its average selling worth of $2,138 a metric ton for aluminum within the latest quarter was down 13 % compared with the year-ago period.