US-based aluminium company Alcoa has projected that US tariffs on Canadian aluminium imports will cost the company $90m for the current quarter, while announcing the financial results for the first quarter of 2025 (Q1 2025).
The company also announced an unfavourable impact of $15m on restart costs for the San Ciprián smelter in Spain.
However, the company expects a sequential $165m benefit in alumina costs within its aluminium segment.
The 25% tariff on aluminium imports imposed by US President Donald Trump is significantly affecting Alcoa's operations.
Alcoa reported that the tariffs had already cost the company around $20m during Q1.
The tariffs, coupled with high duties on Chinese imports, are expected to increase Alcoa's annual costs by an additional $10m–15m, as the company has not identified suitable replacement suppliers, reported Reuters.
Alcoa CEO William Oplinger said during a post-earnings conference call: "Approximately 70% of our aluminium produced in Canada is destined for US customers and is now subject to 25% tariff costs… Currently, the net annual result is approximately $100m negative for our business."
Oplinger highlighted the challenges around US production capacity, noting that even with all idle smelting capacity restarted, there would still be a shortfall of 3.6 million tonnes (mt).
He stressed the importance of Canadian aluminium for the US market, stating: "Until additional smelting capacity is built in the US, the most efficient aluminium supply chain is Canadian aluminium flowing into the country."
Alcoa's financial performance in Q1 2025 has shown resilience despite these challenges, with net income increasing by 171% to $548m.
Adjusted net income also saw a 106% increase to $568m, and adjusted EBITDA (earnings before interest, taxes, depreciation and amortisation) excluding special items climbed to $855m, a 26% increase.
During Q1, Alcoa also engaged with administrations, governments and policymakers both in the US and internationally concerning the effects of tariffs on trade flows and the significance of primary aluminium to the US economy, given the highly integrated aluminium supply chain.
Furthermore, the company collaborated with customers, suppliers and logistics companies to prevent supply disruptions.
