Alcoa Touts Strong Aluminum Fundamentals at BMO Conference, Eyes $1B in Asset Sales
February 24, 2026 · by Fintool Agent
Alcoa CEO William Oplinger delivered an optimistic 2026 outlook at the 35th BMO Global Metals, Mining & Critical Minerals Conference in Hollywood, Florida today, citing structural supply constraints and regional deficits that should keep aluminum prices elevated even as the company navigates pressure in the alumina market.
Shares of AA rose 1.25% to $60.56 in afternoon trading, extending a remarkable 74% gain over the past twelve months as aluminum fundamentals have strengthened.
Asset Monetization: $500M to $1B by Mid-2026
The centerpiece of Oplinger's presentation was Alcoa's capital allocation framework, which prioritizes maintaining a strong balance sheet while pursuing disciplined growth. The company is actively pursuing asset sales that could generate $500 million to $1 billion by mid-2026.
"We progressed monetization of transformation assets in the U.S., expecting an agreement in the first half of 2026," Alcoa stated in its investor presentation, referring to idled or underperforming facilities the company is looking to divest.
Ask Fintool AI AgentAluminum Market: China Cap Holding, Regional Deficits Persist
Oplinger emphasized that China's adherence to its 45 million metric ton annual production cap—a policy in place since 2017—remains the critical tailwind for global aluminum prices.
"We see them sticking to that cap, and they've stuck to it over the last four or five years, which is really important for the aluminum industry," Oplinger said at the conference.
LME aluminum prices have rallied 18% year-over-year to approximately $3,100 per metric ton, supported by:
- North America deficit: Projected at 1.9 million metric tons for 2026
- European deficit: Bolstered by CBAM (Carbon Border Adjustment Mechanism) implementation
- Supply disruptions: Smelter curtailments in Iceland, Mozambique, and Australia
- Indonesia delays: Chinese smelter expansions facing energy cost and regulatory hurdles
The company expects the global aluminum market to remain balanced to slightly deficit through 2026, with battery storage emerging as a growth demand driver in China.
Tariffs and CBAM: Net Positive for Alcoa
In a market increasingly focused on trade policy, Alcoa positioned itself as a beneficiary of both U.S. tariffs and European carbon regulations.
"Today, the Midwest premium is high. It covers the tariffs. It's higher than just covering the tariffs, and we think that's representative of the strength of the demand that we're seeing in North America," Oplinger explained.
| Regional Premium | % of 2026 Shipments |
|---|---|
| Midwest (U.S.) | 35% |
| Rotterdam Duty Paid (Europe) | 35% |
| Midwest Duty Unpaid | 25% |
| CIF Japan | 5% |
On CBAM, Alcoa expects a net positive impact in 2026, with industry analysts estimating the Rotterdam duty paid premium will incorporate approximately $40/mt upcharge as the mechanism transitions to full implementation. Alcoa's domestic Scope 1 emissions sit below the average emissions of imports—a structural advantage in a carbon-priced world.
Ask Fintool AI AgentAlumina: Headwinds Persist
Not all news was positive. The alumina market remains under pressure from oversupply and declining prices, which fell to $341/mt in Q4 2025 from $377/mt in Q3.
Alcoa's Alumina segment Adjusted EBITDA dropped sequentially from $67 million in Q3 to $31 million in Q4, a $36 million decline driven primarily by the 97-point impact of lower Alumina Price Index (API) pricing.
However, management noted that Alcoa's alumina cost position "provides resilience in low price environment," and that long-term supply agreements enable the company to earn premiums over index prices.
For Q1 2026, the company expects unfavorable alumina segment performance of approximately $30 million due to typical first-quarter maintenance cycles and lower bauxite offtake volumes.
2025 Results and 2026 Outlook
Alcoa delivered strong 2025 results that underpin management's confidence:
| Metric | FY 2024 | FY 2025 | Change |
|---|---|---|---|
| Revenue | $11.9B | $12.8B | +8% |
| Net Income | $60M | $1.17B | +1,850% |
| Adjusted EBITDA | $1.59B | $2.0B | +25% |
| EPS | $0.26 | $4.42 | +1,600% |
| Return on Equity | 6.5% | 16.4% | +990 bps |
For 2026, Alcoa guided:
- Alumina production: 9.7–9.9 million metric tons
- Aluminum production: 2.4–2.6 million metric tons
- Capital expenditures: ~$750 million ($675M sustaining, $75M return-seeking)
- Depreciation: ~$630 million
San Ciprián Restart Progressing
The restart of Alcoa's San Ciprián smelter in Spain reached approximately 65% completion at quarter end, adding to production capacity that had been curtailed. The Spain operation is part of Alcoa's efforts to capitalize on strengthening European premiums.
However, management cautioned that Q1 2026 aluminum segment performance is expected to be unfavorable by approximately $70 million due to non-recurrence of Spain and Norway carbon dioxide compensation recognized in Q4, plus additional restart costs at San Ciprián.
ELYSIS Breakthrough: Carbon-Free Smelting at Scale
Perhaps the most significant long-term development highlighted was the successful startup of ELYSIS's 450 kiloampere (kA) inert anode cell at Rio Tinto's Alma smelter in Quebec—the first implementation of carbon-free aluminum smelting technology at commercial scale.
ELYSIS, a joint venture between Alcoa and Rio Tinto, produces aluminum that emits oxygen instead of carbon dioxide—a potential game-changer for an industry facing increasing pressure to decarbonize.
"ELYSIS® technology has the potential to fundamentally change the future of our industry, and with the successful implementation at a commercial-size scale, we are one step closer to bringing the technology to market," Oplinger stated.
The joint venture aims to commercialize the technology by 2030, with potential applications for both retrofitting existing smelters and installation in new facilities.
Ask Fintool AI AgentWhat to Watch
Near-term catalysts:
- Q1 2026 earnings (late April) with San Ciprián restart progress
- Transformation asset sale announcement expected in H1 2026
- Western Australia mine approval decision on timeline for 2026
Key sensitivities for 2026 (per $100/mt change):
- LME aluminum: +$237M Adjusted EBITDA
- Midwest premium (paid): +$94M Adjusted EBITDA
- Rotterdam premium: +$88M Adjusted EBITDA
Risks:
- Further alumina price declines pressuring refinery margins
- Trade policy volatility if tariff levels change
- Currency headwinds, particularly AUD and BRL exposure
Alcoa shares trade at $60.56, up 74% over the past year. Analyst consensus is mixed with a Hold rating and average price target of $61, suggesting limited near-term upside from current levels.*
Values retrieved from S&P Global and third-party analyst aggregators