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How Does Alcoa’s Production Profile Compare to Its Peers?

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Alcoa’s production profile

Aluminum production is a key driver of aluminum companies’ performances. For this reason, it’s important for investors in the metals and mining space to follow production and shipment data. Mining companies’ revenues are functions of commodity prices and shipments.

Mining companies don’t have pricing power due to the commoditized nature of their business. So, changes in shipments tend to determine how one company’s revenue changes compared to others. In this part, we’ll look at different aluminum companies’ 2016 production profile.

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2016 aluminum production

  • Alcoa (AA) produced 2.42 million metric tons of aluminum in 2016—compared to 2.81 million metric tons in 2015.
  • Century Aluminum’s (CENX) 2016 aluminum shipments fell steeply—compared to 2015. The company shipped 733,825 metric tons of aluminum in 2016—compared to 921,958 metric tons in 2015. It represents a yearly decline of more than 20%.
  • Norsk Hydro (NHYDY) produced 2.08 million metric tons of aluminum last year—compared to 2.04 million metric tons in 2015.
  • RUSAL produced 3.6 million metric tons of aluminum last year—1.1% higher compared to 2015.
  • Rio Tinto (RIO) produced 3.6 million metric tons of aluminum in 2016—10% higher compared to 2015.

US-based aluminum producers’ (SPY) (SPX) revenues have been impacted negatively in recent quarters due to lower shipments. Both Alcoa and Century Aluminum closed or curtailed their high-cost smelters in a bid to remain competitive in the low pricing environment. Meanwhile, other producers have been steadily increasing their production.

Along with historical production data, you should also look at the production guidance. We’ll discuss this more in the next part.

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