Davis Index: Market Intelligence for the Global Metals and Recycled Materials Markets

Alcoa decides to halt smelter operations at San Ciprian, Spain and plans to layoff 530 employees. The curtailment of smelter operation is expected to be complete in Q1FY2021. The company announced that the situation at San Ciprian remains uncompetitive and the company does not expect its structural issues to resolve.


Alcoa made this announcement on Oct 9 after considering all the options and reviewing records related to the consultations with workers. Earlier, on Sep 29, the company had indicated that it would announce the next course of action in 15 days. San Ciprian smelter’s annual output is 228,000mt. Operations at its cast house will continue. Also, the alumina refinery at San Ciprián will remain operative.


Smelting at San Ciprian is not viable considering the global aluminium overcapacity, depressed prices and unfavourable power tariffs in Spain. The aluminium plant incurred a net loss of $45mn through Sep 30. In 2018 and  2019, the plant incurred combined losses of $126mn.


Alcoa has decided to defend its position if the workers’ representatives challenge the collective dismissal (layoff). The company warned that such a challenge could impact the timing and the amount of the severance packages.


Alcoa is an integrated producer of bauxite, alumina and aluminium products. 

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