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US rolled aluminum producer Arconic will idle its San Antonio, Texas, micromill by the end of 2019, the latest in a series of budget cutting measures by the global aluminum industry.
The advanced mill can produce coils of aluminum sheet from molten metal in less than an hour whereas conventional mills take days to complete the same process. The facility produces specialized materials for the aerospace and automotive markets.
Large aluminum companies are reducing investments and attempting to run leaner operations at a time when measurements of manufacturing, such as the European and US purchasing managers' indexes (PMI), indicate contraction.Aluminum prices also are falling, with the midwest transaction price, used in pricing finished aluminum, dropping by 14pc in the third quarter from a year earlier.
Alcoa in July sold two primary aluminum smelters in Spain and divested itself of a rolling mill joint venture with Saudi Arabia's Ma'aden mining company to focus on its core assets. Norwegian integrated primary aluminum maker Norsk Hydro, which has some operations in the US, also plans to cut costs over the next several years.
Arconic boosted its global rolled aluminum shipments by 6pc to 351,000t in the third quarter from a year earlier, driven by strong demand across "all key markets."
Revenue rose to $3.6bn, a 1pc gain from the year earlier quarter, including the effects of recent divestitures and fluctuations in aluminum pricing and currency exchange. Excluding those factors, revenue grew by 6pc from a year earlier.
The company cut its 2019 revenue guidance to $14.15bn-14.35bn, from the prior quarter's forecast of $14.3-14.6bn, citing lower aluminum prices and divestitures.
Profit fell to $95mn from $161mn a year earlier as Arconic took $108mn in non-cash asset impairments.