Seeking Alpha

Alcoa CEO says cost position improving amid industry transformation

  • Alcoa (AA +0.5%) CEO Klaus Kleinfeld tells CNBC that the metals industry is experiencing its biggest transformation in 125 years, as higher demand for lighter aluminum alloys from the auto and aircraft industries means a shift away from smelting.
  • Alcoa no longer needs to focus on fluctuations in the metals markets as demand for lighter aluminum alloys has gone "mainstream," Kleinfeld says.
  • Kleinfeld says the company could now be profitable "no matter where the metal price is" as a result of its cost-cutting.
Comments (2)
  • papcollins
    , contributor
    Comments (25) | Send Message
     
    Next step: Sell off the refining and smelting divisions a la what PPG did with the commodity glass businesses a generation ago.
    22 May 2014, 12:21 PM Reply Like
  • manfredthree
    , contributor
    Comments (2350) | Send Message
     
    "Transformation" describes the long term secular change, a fundamental increase in demand,
    Aluminum currently sells for less than production cost.
    Conclusion : Aluminum prices are going up.

     

    So, why would producers disband any more smelting/refining capacity than they are absolutely forced to until such time as new longer term price levels become visible.
    Yes, aluminum has faced a major campaign of misinformation, but that will not keep its price from rising when demand and supply are on a transformational collision course.
    23 May 2014, 08:45 AM Reply Like
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