Iron ore price weakens as Australia flags return to sub-$100 prices
Futures dropped for a fourth day in Singapore, to trade about 3% lower for the week.
Alcoa Corp. said it started job cuts at an Australian alumina refinery amid a glut of the raw material, which is used to make aluminum.
The Pittsburgh-based company said it “initiated a restructuring program” at the Kwinana alumina refinery located near Perth, Western Australia. It took a $6 million charge in the third quarter for “employee severance costs to be paid through the first quarter of 2024,” the company said in a statement Wednesday.
The plant was the first of Alcoa’s three Western Australia alumina refineries that’s been in operation for about 60 years with the capacity to produce about 2.2 million metric tons of the raw material. The decision comes as Alcoa has been struggling with operational and permitting setbacks in Australia for bauxite, a key feedstock for the refineries.
Aloca has “continued to make progress with relevant state government agencies in support of the annual mine approvals process for bauxite mining at the Huntly and Willowdale mines,” the company said.
Alcoa last month abruptly announced that William Oplinger was replacing Roy Harvey as chief executive officer of the company. Shares of the company are down about 40% this year amid ongoing concerns of a global slowdown in consumption of the metal used in everything from kitchen appliances to automobiles.
For the third quarter, the company reported adjusted earnings before special items of $70 million, topping an estimate of $47.9 million.
“We saw positive improvements in raw material and production costs, but lower average realized pricing for alumina and aluminum had the biggest impact on our results,” Oplinger said in the statement.
The company’s alumina business segment accounts for some 28% of total revenue. The price of aluminum is down about 8% this year, headed for a second straight year of losses.
(By Joe Deaux)
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