Alcoa Plans to Reduce its Smelting Capacity in Reaction to Decrease in Aluminum Prices

Reduction in aluminum prices sure has affected lots of industry and among its major victims includes Alcoa Inc (NYSE:AA) which has decided to reduce its smelting capacity. In reaction to sudden decrease in aluminum prices, Alcoa Inc has decided to cut its smelting capacity by 12 percent or 531,000 metric tons.

The recent move will result in permanently shut down of company’s smelter in Alcoa, Tenn. Moreover, another two smelters in Rockdale Texas have also closed down as a part company’s plan. The company also indicated that if the price remained unstable in future further reduction in capacity of 4.5 million metric tons could be implemented.

The company also disclosed that shutting down of smelters will result in restructuring charges up to $0.16 in the fourth quarter. It is expected that the ceasing of the company’s production will affect its operations however it is not known how many employees will be affected.

The company’s shares fell 2.14 percent to close at $9.16 in its last trading session. Traded volume stood at 35.18 million shares as compared to its average volume figure of 28.54 million shares per day. The share price is trading at a price to earnings of 9.71 times.

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Alan Smalling

About Alan Smalling

Alan is the latest addition to our news and development team. He has worked with Pete previously on other financial websites. When we can keep him at low altitude, his contributions will mainly be focused on company news and new product launches.

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