Alcoa : Bank of America Global Metals, Mining and Steel Conference 2026 Transcript

Published: 2026-05-14 07:14:09 ET AA

Published on 05/14/2026 at 07:14 am EDT

Alcoa Corporation

Bank of America Global Metals, Mining and Steel Conference 2026 Conference

Wednesday, May 13, 2026, 10:00 AM Eastern

You know, I've lost track of how many of these conferences I've been to over the years, but it's always, always good to come back. When you're considering Alcoa Corp. as an investment, we've got a lot going on and a lot of favorable progress in the company over the last five years, currently very focused on safe operations and, knock on wood, we've had safe operations so far this year, strong stability and continuous improvement. So, we had a good first quarter. We're anticipating a strong second quarter. And so, those are really the day to day focus.

In addition to that, we've been executing on a number of strategic priorities. We're continuing to progress the Western Australia bauxite mining approvals. That's going well. In addition to that, we're in the process of monetizing some of our assets in the closing curtailed area. So, we've been looking, as we've said, we've been looking at selling the data centers and monetizing about $500 million to $1 billion. We anticipate the first of those to be very -- to happen soon. So, we're making progress. We announced in the first quarter that we're making progress with NYDIG at the Massena East site. So, we're anticipating that will happen quickly.

And on top of that, we're continuing to focus on growth. And we introduced the concept that we would consider growing really last year and we just announced in the last couple of days an investment in Northern Norway, where we're going to build out our recycling capability to meet customers' needs for recycled content. So, that's a $65 million investment in our Mosjøen facility, great facility, low cost energy, wonderful smelter attached to it. So, adding recycling capability there to meet our customers' need in Europe.

So, lots going on in the world, lots going on in the industry. We're focused on, you know, running the operations extremely well, safely and executing on our strategic initiatives even while there's a lot of noise in the system.

So, I've got some questions here, and I'm going to just scramble them up a little bit just to continue to...

Century capacity in Iceland. At the same time, we have seen that the Chinese are limiting production to the 45 million metric ton cap. We had anticipated going into 2026 that the aluminum market would be in a slight deficit and would draw down inventory, so we were very constructive on the aluminum market going into the year.

Clearly, with an additional 2.5 million metric tons coming offline in the Middle East, that has put a lot of pressure on pricing and supply. We have not yet seen physical scarcity of metal, either in Europe or in North America. We think we could see real physical scarcity of metal over the next six months in Europe or in North America. What that means is that Midwest premium has elevated to, last time I looked, about $1.16 a pound, so put that in dollars per ton, that's what, about $2,400? I won't get my math right,

$2,400, $2,500 a ton. So, premiums have been very strong.

We've seen Rotterdam premiums also go up. And just one side note, on the Rotterdam premium, we are estimating that we thought there would be about $40 per ton built in related to the CBAM. We think there is, but it's hard to say, given all the dynamics in the market, how much of that's being driven by the conflict versus how much is being driven by CBAM.

Probably very similar to the folks at Norsk Hydro. We're seeing a switch from customers who had supply chains that reached all the way back to the Middle East, and we're getting customers now coming saying, hey, we need supply security. And that's both in Europe and in North America.

So, while people have talked about demand destruction, we're just not seeing it, right? Our order books are improving every week, and we still have some excess capacity in North America that we can fill, but really strength in demand, and it's hard to parse out, is that related to underlying demand or is that related to the conflict?

If we then go to some of the direct consumers around natural gas, in Western Australia, we have long-term contracts on natural gas. In Spain, where our refinery would be exposed to spot natural gas, we've hedged that gas price through 2027, so that will provide some security of pricing in Spain. And then if you keep going, we have some oil exposure in Brazil, but not significant, and then come down to mining diesel. We've secured our mining diesel through the end of June, so we feel confident that we've got good security of supply on diesel. So, from an energy perspective, while the energy disruptions are driving a lot of the top-line impacts, we're pretty well covered on the cost side.

If we then go into some of the more aluminum-intensive raw materials, caustic prices we've seen are taking up a little bit. We've got a six-month lag on caustic prices, so we won't see those impacts until much later in the year. Coke and pitch prices have increased a little bit also, and those are typically on a one-quarter lag.

the price has gone up a little bit, their costs have gone up so much that it's not worth producing, and particularly once you take the shipping into account. When do you get to that pressure point in your alumina operations, your bauxite operations?

If we then go over to Brazil, the Alumar refinery has really performed exceedingly well. So, the Alumar refinery is running at a very high level. They've been able to drive costs out, so Alumar has been very successful. Pocos meets the needs of an NMA set of customers down in Brazil, and then we have Spain. And so, right now Spain is under pressure with the low alumina prices, and that offsets some of the positive that we've seen out of the smelter in Spain. So, with alumina prices at $305, $310 puts a lot of pressure on the Spain refinery.

If I then go to other parts of the world, we're ramping up capacity in small amounts in Australia. So, we are adding additional pots in Australia, not new pots, but turning the pots on. Similar case in southern Norway, so we've got a small plant in southern Norway fully ramped up. Down in Brazil, the smelter in Brazil, which has -- the startup has been very difficult over the years. We have very good, strong stability today. We're running at about 90% capacity, and we'll continue to ramp up that smelter over time. The real important part there is that we have stability because from time to time we've had issues where we lose production there. So, good stability today.

And then we come to Quebec. Quebec is running flat out. Quebec is one of the crown jewels of the company. It's running flat out. And then in the U.S., we've just re-signed a long-term power deal in Massena. It's a 10-year deal with two 5-year potential extensions. So that gives Massena a real line of sight to being successful over the next decade. And then in the case of Warrick, which is in southern Indiana, we still have 50,000 metric tons of capacity there. Actively looking at what scenarios it would take to restart Warrick. Warrick has been historically a difficult facility to run at four lines. And right now we have good stability running three lines, and we'll consider what it would take to restart the fourth line.

-- the biggest aluminum companies in the world are going to be investing in? Also, considering the Middle East has become hit by yet another problem, which is geopolitics and military. So, how do you see that

production growth evolving? We do need aluminum. I assume that, right? Because we're not going to get the production at this pace.

We see the demand. The issue if -- you know, I've been in this company for 26 years. I've been following the aluminum industry for 26 years. The issue has never really been demand growth. It's always been supply growth that matches that demand growth. The Chinese seem to be firmly capping at the 45 million metric tons. They've not deviated from that over the last couple of years. We're not seeing them deviate from that today. They are going outside of China and growing in places like Indonesia and having some success in Indonesia, but it's turning out not to be quite as easy in Indonesia as it is to grow in China.

Historically, if you'd asked me a year ago, I could have told you that in the Middle East, we will see potential for supply growth. In the Middle East, I think the conflict throws that into uncertainty. And so, then you match a market that has underlying demand growth that grows year in and year out. Everything you touch, everything you -- whether you fly, you drive, you work in a building, you drink out of a can, everything has aluminum in it, and that will continue to grow, and the supply is now limited. So, we're seeing what we view as a constructive market for aluminum over the next five years.

And so we -- and just to talk about us a little while, and that is we're long in all three of our markets. So, we're long in bauxite, we're long in alumina, we're long in aluminum. If you follow this industry long enough, you will realize that you never quite know where the value will accrue in that supply chain. Sometimes the value accrues to bauxite. We've seen it in times like 2018 where significant value accrues to the refining. Today, a lot of the value in the industry is accruing to smelting. We like to be long in all three of those to be able to capture those market changes over time.

So, just from real short to sum it up, we think that the dynamics are different. I hate to say they're different this time, but we actually see some limitation of supply specifically out of China that will allow that demand growth to really have a constructive picture for the aluminum industry.

Okay, well, now we've prompted some questions. Maybe somebody's going to argue with me.

And so as they work through USMCA, we'll let them work on that. But our customers need Canadian metal. Now, with today's pricing, the prices are high enough that it still incents our Canadian metal to come in to the US. But as they look at USMCA, it does not make sense for Quebec metal to be going to Europe. Quebec metal should be coming into the United States.

If that reverses, which does not show any signs of reversing at this point, with the data center demand in the United States, put it in perspective, and I think most of this is public information, the data centers are able to pay

$110 to $120 a megawatt hour for a 20-year take or pay, right? Nobody builds a smelter in the world at half of that. And so, that's the issue that the United States has. It's all around cheap electricity.

so clear that license to operate is critically important. I've been pretty public around some of the approvals issues that we've had in Western Australia. Those approvals issues were really, in my view, self-inflicted, right?

We need to have very strong regional leadership that can be attuned to stakeholder requirements and be able to act on those stakeholder requirements. In Western Australia, we saw stakeholder needs really escalating quickly. We weren't in a position to be able to react to those stakeholder needs. So, in the mining area, license to operate is critically important. I think you can say the same thing around refining and smelting. And so, for our business, one of our key, and probably if you talk to any large aluminum business in the world, it's having successful relationships with all of our stakeholders in the regions in which we operate, and that includes governments.

And so, we have spent over the last couple of years, really a lot of effort trying to improve our stakeholder relationships to ensure that we have the license to operate in all the regions we work in.

Disclaimer

Alcoa Corporation published this content on May 13, 2026, and is solely responsible for the information contained herein. Distributed via Public Technologies (PUBT), unedited and unaltered, on May 14, 2026 at 11:13 UTC.