Aluminum prices remain high to alleviate tariff pain! Alcoa Corporation (AA.US) net profit in Q3 increased by 158% year-on-year, and tariff costs in Q4 may rise by another 50 million.

Alcoa Corporation (AA.US) disclosed its performance report for the third quarter of 2025. The report shows that the tariffs imposed by the United States on Canadian aluminum have led to a loss of $69 million for the company in this quarter, an increase compared to the previous quarter. However, the increase in domestic aluminum prices effectively offset this impact, and the premium in the Central West region has been sufficient to offset the net adverse impact of the import tariffs on Canadian smelters. At the same time, the company stated that the reduced exports of aluminum from Canada to the United States earlier this year have returned to normal levels. Specific financial data shows that Alcoa Corporation's revenue for the third quarter reached $2.995 billion, an increase from $2.904 billion in the same period last year; net profit attributable to the company was $232 million, compared to $90 million in the same period last year, an increase of nearly 158%; adjusted net loss was $6 million, compared to a net profit of $135 million in the same period last year; adjusted loss per share was $0.02, compared to earnings per share of $0.57 in the same period last year; adjusted EBITDA was $270 million, compared to $455 million in the same period last year. From a production and operational perspective, aluminum oxide production in the third quarter increased by 4% to 2.5 million tons, mainly due to reduced maintenance at the Australian refinery and increased production; aluminum business segment production increased by 1% to 579,000 tons, mainly due to the successful restart of the San Ciprin smelter in Spain. Third-party shipments of aluminum oxide remained stable at 2.2 million tons, with the increase offset by reduced trading activities; total aluminum shipments decreased by 3% due to adjustments in trade volumes and shipping times. The company further explained that the $232 million net profit ($0.88 per common share) includes gains from the sale of Ma'aden joint venture interests and favorable changes in Ma'aden stock prices, partially offset by restructuring costs. Changes in the quarter-on-quarter reflect factors such as increased import tariff costs, increased retirement obligations for Brazilian assets, adverse exchange rate effects, and lower aluminum oxide prices, with the rise in aluminum prices partially offset. Cash generated from operating activities in this quarter was $85 million, with an end-of-quarter cash balance of $1.5 billion. In significant developments, on October 22, the company announced a long-term energy contract with the New York Power Authority and invested approximately $60 million in anode baking furnace at the Marn smelter to support future operations; on October 20, it received support from the U.S. and Australian governments to advance the project to jointly build a gallium plant at the Wagerup refinery in Australia. It is worth mentioning that due to the impact of Trump's trade measures, the increase in aluminum prices in the United States in 2025 continues to lead the international market, with a premium in the Central West region (a regional premium above the global benchmark price) soaring 113% since early June. Despite the increase in aluminum prices offsetting some costs, the company expects import tariff costs to increase by another $50 million in the fourth quarter, indicating that trade measures continue to have an impact. CEO William Oplinger noted in the financial report conference call that the rise in aluminum prices in the United States "reflects lower inventories and reduced aluminum imports." Looking back at trade policies, Trump imposed a 25% tariff on aluminum imports in March, doubling it to 50% in June, stating that this was necessary to protect Alcoa Corporation and revitalize production. The company disclosed in July that import tariff costs in the second quarter reached as high as $115 million. Looking ahead, Alcoa Corporation expects total aluminum oxide production to remain between 9.5 million and 9.7 million tons in 2025, with shipments of 13.1 million to 13.3 million tons; aluminum production is expected to be between 2.3 million and 2.5 million tons, with shipments of 2.5 million to 2.6 million tons, consistent with previous forecasts. Specifically for the fourth quarter, the EBITDA of the aluminum oxide department is expected to improve by approximately $80 million due to the absence of asset retirement costs, increased shipments, and reduced maintenance costs; the aluminum business segment is expected to be negatively affected by $20 million due to the lack of efficiency in the restart of the San Ciprin smelter and a decline in third-party energy sales, partially offset by increased shipments; aluminum oxide costs are expected to increase by $45 million; operating taxes are expected to be between $40 million and $50 million, depending on market conditions and jurisdictional profitability.