Alcoa reports full-year 2025 results, details 2026 outlook

For 2026, the Pittsburgh-based producer expects aluminum supply disruptions to continue offsetting anticipated smelter growth in Asia outside of China. China is described as nearing its smelter capacity cap, with limited room for additional supply growth.

Alcoa’s qualitative outlook for value-added products points to uneven demand conditions across end markets.

Rod demand is expected to remain “exceptionally strong,” while slab demand is described as steady and supported by robust demand from the packaging end market.

Automotive slab, however, continues to face headwinds stemming from the impacts of downtime at Novelis’ Oswego mill in New York, which has weighed on automotive-related flat-rolled demand dynamics.

Billet demand is expected to improve moving forward, supported by reshoring activity, while foundry alloy demand remains pressured amid narrow OEM profitability. Management expects foundry alloy demand pressure to persist, with softness anticipated to carry into 2026 rather than improve materially in the near term.

Premium exposure

Alcoa estimates about 35% of its 2026 primary aluminum shipments will be subject to the US duty-paid Midwest premium, with an additional 25% exposed to the duty-unpaid Midwest premium.

This indicates roughly half of the company’s primary aluminum shipments in 2026 would be priced using Midwest premium-based delivery mechanisms.

Based on Alcoa’s 2026 shipment outlook, this would equate to about 1.35 million metric tons of primary aluminum shipments priced with reference to US Midwest premiums. Of that total, roughly 945,000 metric tons would be subject specifically to the duty-paid Midwest premium itself.

While it is possible for aluminum priced using the Midwest premium to be delivered outside the US or broader North American market, the Midwest premium is primarily a regional pricing tool used to calculate delivery costs into US markets. As a result, shipments subject to Midwest premium pricing are generally assumed to be intended for US or North American delivery.

Alcoa’s estimate exposure comes as the US Midwest premium has recently reached 98.5¢-99¢/lb, according to CRU, and is approaching the $1/lb threshold. For context, this compares with a 15¢-16¢/lb duty-paid Rotterdam premium applied to European delivery pricing.

Production in 2025

In 2025, aluminum production increased by 5% to 2.3 million metric tons, driven primarily by the restart of curtailed capacity at the Alumar (Brazil), San Ciprián (Spain), and Lista (Norway) smelters. These restarts more than offset prior curtailments and supported higher overall output compared with 2024.

Conversely, total 2025 alumina production declined by 4% to 9.6 million metric tons, largely resulting from the full curtailment of the Kwinana refinery in Australia, which was completed in June 2024. No offsetting refinery restarts were reported during the year.

Shipments

Despite higher aluminum production, total shipments fell by 3% in 2025 from the previous year. The decrease was primarily due to the absence of Saudi Arabian Mining Company (Ma’aden) offtake volumes following the sale of Alcoa’s interest in the joint venture, partially offset by higher production levels at restarted smelters.

In the alumina segment, annual third-party shipments softened by 2%, reflecting reduced trading activity and lower production volumes. This decline was partially offset by increased sales of externally sourced alumina to fulfil customer commitments.

Pricing and financials

Total third-party revenue for 2025 increased by 8% to $12.8 billion, underpinned by a higher average realized third-party price of aluminum, along with higher volumes and pricing from bauxite offtake and supply agreements.

These gains were partially counterbalanced by lower aluminum shipment volumes and a lower average realized third-party price of alumina.

Net income attributable to Alcoa rose to $1.2 billion for the full year compared with $60 million in the prior year.

The year-over-year improvement was supported by higher aluminum prices, gains related to the sale of Alcoa’s interest in the Ma’aden joint venture, favorable tax impacts, favorable mark-to-market changes on Ma’aden share, and favorable currency impacts.

In contrast, the company also faced increased restructuring charges, higher tariff costs on imported aluminum, lower alumina prices, and a goodwill impairment charge.

Investment posture

Management commentary during the earnings call underscored a continued emphasis on capital discipline amid an environment still shaped by tariffs and elevated regional pricing distortions.

Company executives said they do not see conditions that would justify greenfield aluminum investments, nothing they have not identified regions globally with sufficiently low energy costs that support that level of capital commitment.

At the same time, management indicated opportunities for brownfield investment remain across existing smelters, refineries, and mines, reinforcing a preference for incremental, asset-specific improvements rather than large-scale capacity additions.

Executives also said the company does not plan to implement the Elysis technology at any facilities prior to 2030 at the earliest. Elysis is a proprietary inert anode smelting technology developed through a joint venture between Alcoa and Rio Tinto, with support from Apple and the governments of Canada and Quebec. Elysis replaces carbon anodes with inert materials, producing oxygen instead of carbon dioxide during the electrolysis process in aluminum smelting.

Collectively, the comments, as well as the full year results and 2026 outlook, point to a strategy focused on navigating current tariff and cost structures, rather than pursuing transformational investments, as the company enter the new year.