Aluminum prices rise but fail to conceal decline. Alcoa Corporation's (AA.US) Q1 revenue and profits both fall below expectations, maintaining annual production forecast.

Despite the rise in aluminum prices, Alcoa Corporation (AA.US) reported lower-than-expected earnings and revenue for the first quarter. The financial report shows that Alcoa Corporation's Q1 revenue was $3.19 billion, a 5.3% decrease year-on-year, which was $80 million lower than expected; adjusted earnings per share were $1.40, below the expected $1.55. For the first quarter ending March 31, the company's alumina production decreased by 5% to 2.4 million metric tons, while aluminum production remained flat at 607,000 metric tons. The third-party alumina shipments decreased by 31% due to lower external alumina purchases for customer commitments, reduced first-quarter seasonal shipments, and delayed shipments from Australia. Total aluminum shipments decreased by 8%. Alcoa Corporation expects total alumina production and shipments for the aluminum business in 2026 to be in line with previous forecasts, between 9.7 million and 9.9 million metric tons and between 11.8 million and 12 million metric tons, respectively. The difference between production and shipments reflects trading volumes and external alumina purchases to fulfill customer contracts. The company forecasts that total aluminum production and shipments in 2026 will be consistent with previous forecasts, at 2.4 million to 2.6 million metric tons and 2.6 million to 2.8 million metric tons, respectively. Alcoa Corporation predicts that adjusted EBITDA for the alumina business in the second quarter of 2026 will be adversely impacted by approximately $15 million due to a decrease in alumina purchase agreement prices and volumes, as well as an increase in energy prices (mainly diesel) resulting from the conflict in the Middle East. The company forecasts that adjusted EBITDA for the aluminum business in the second quarter of 2026 will increase by approximately $55 million compared to the previous quarter, primarily due to inventory adjustments taken in the first quarter of 2026, higher shipment volumes and product premiums, and lower production costs after the restart of the San Ciprin smelter. However, some growth will be offset by a decrease in seasonal third-party energy sales. Due to the recent increase in LME and Midwest region premiums and expected higher shipment volumes, the estimated cost of Section 232 tariffs for importing aluminum from Canada into the US is expected to increase by approximately $35 million compared to the previous quarter. The cost of alumina for the aluminum business is expected to decrease by approximately $20 million compared to the previous quarter.