Alcoa cuts 2026 alumina output guidance on Western Australia refinery issues

Author: Nathan Owens, Manufacturing Dive Read Time: 3 min

Dive Brief

• Alcoa has reduced its 2026 production guidance for alumina by 200,000 to 300,000 metric tons, citing operational challenges at its Pinjarra refinery in Western Australia.
• The Pittsburgh-based company updated its full-year expectations to 9.5 million to 9.6 million metric tons of alumina, following "instability in late March [that] was further exacerbated by gas supply disruptions" from Cyclone Narelle.
• Alcoa also lowered its alumina shipment expectations and increased corporate expenses for the year. Pinjarra has since returned to "stable operating rates," and alumina prices remain solid despite ongoing geopolitical disruptions in the Middle East, CEO William Oplinger said on an earnings call Thursday.

Dive Insight

As a result of operational disruptions, Alcoa revised its full-year alumina production outlook downward from a previously set range of 9.7 million to 9.9 million metric tons. The Pinjarra facility is one of the world's largest alumina refineries, producing approximately 4.7 million metric tons annually, according to a company fact sheet. Alumina—a fine white powder extracted from bauxite—is a critical raw material used in aluminum production.

For its alumina segment, Alcoa reported a negative adjusted EBITDA of $96 million during the second quarter, driven by:

• $45 million in energy contract losses
• $30 million in higher production costs at Pinjarra

The company operates six alumina refineries across Australia, Brazil, and Spain, and sells roughly half of its production to external customers. Its three-refinery operation in Western Australia—including Pinjarra, Wagerup, and Kwinana Beach—is the world's largest source of alumina, supplying 8% of the global market.

Second-Quarter Performance

• Alumina production declined 6% sequentially to 2.2 million metric tons.
• Third-party alumina sales fell 3.6% sequentially to $552 million for the period ending June 30—down 34.5% from a year ago.

Alcoa also lowered its alumina shipments outlook to 11.5 million to 11.6 million metric tons, down from a previous range of 11.8 million to 12 million metric tons. The company noted that the difference between production and shipment revisions reflects trading volumes and external sourcing to fulfill customer contracts.

Broader Financial Results

Despite the production headwinds, Alcoa reported a strong quarter overall:

• Revenue: Nearly $4 billion, up 24% from the previous quarter and 31% year-over-year.
• Net income: $407 million, down 4% sequentially but more than double the result from a year ago.

"We executed well across the business, and those efforts translate directly into stronger operational and financial results," Oplinger said. "We have momentum entering the second half of the year [and] we remain focused on the things we can control: safety, operational stability, cost discipline and execution."

Alcoa recently agreed to acquire mining and metal assets.

This story was originally published on Manufacturing Dive. To receive daily news and insights, subscribe to our free daily Manufacturing Dive newsletter.