Alcoa(US:AA) Youtube·2026-01-22 22:19Core Viewpoint - Alcoa reported better-than-expected revenue and is projecting production increases in aluminum for 2026, indicating a strong supply-demand picture in the market [1][2]. Financial Performance - The company generated close to $550 million in EBITDA and over $500 million in cash, beating consensus estimates and marking a strong performance for 2025 [2]. - Record production was achieved at several facilities globally, contributing to a robust financial year [2]. Market Dynamics - Global aluminum prices are currently high, with a slight deficit in supply, particularly in North America and Europe, which are key markets for the company [3]. - Demand in North America remains strong across various sectors, including packaging and electrical conductors, while automotive demand shows some weakness [5]. Industry Trends - The aluminum industry is experiencing increased demand due to its use in data centers and AI infrastructure, with approximately 1,500 tons of aluminum required for every gigawatt of energy used in a data center [6]. - The potential for substituting aluminum for copper in certain applications is noted, with an estimated 800,000 tons of aluminum being used globally for this purpose [8]. Trade and Inventory Considerations - The company continues to navigate trade dynamics, with U.S. tariffs being covered by current metal prices, allowing for continued shipments from Canada to the U.S. market [9][10]. - Global aluminum inventories are at their lowest levels in 15 years, indicating a tight market, although production from Indonesia is expected to ramp up in 2026 [12]. Future Investments - The company has considered investing in smelting capabilities in Greenland, contingent on securing low-cost energy, which is essential for building new aluminum capacity [15][16]. - Infrastructure development in Greenland would be necessary, including hydro facilities, which would require time to establish [17].