Alcoa Faces $90M Q2 Tariff Hit, Warns of US Aluminum Shortage

Key Impacts:

• 💰 90MQ2Blow:∗∗Alcoaexpects∗∗2590MQ2Blow:∗∗Alcoaexpects∗∗2590M this quarter (vs. $20M in Q1).
• 📉 Annual Drag: Tariffs will slash $100M/year from earnings due to 70% of Canadian output going to US buyers.
• 🇨🇳 China Surcharge: Additional 10M–10M–15M/year in costs as US tariffs hike prices on Chinese raw materials.

Why It Matters:

1. US Supply Crisis:
   • Even restarting idle US smelters would leave a 3.6M-ton annual deficit.
   • CEO: “Canadian aluminum is the most efficient supply for the US—until new smelters are built.”
2. Trade War Fallout:
   • Trump’s 25% aluminum tariffs disrupt North American supply chains.
   • No easy fix: China tariffs compound costs with no alternative suppliers.

What’s Next?

• Lobbying Push: Alcoa may pressure Washington for Canadian tariff exemptions.
• Price Hikes: Costs could trickle down to auto, aerospace, and beverage can buyers.
• Capacity Bets: US may incentivize new smelter projects to reduce import reliance.