Aluminium producer Alcoa has lowered its forecast for adjusted earnings before interest, tax, depreciation and amortisation (EBITDA) for 2018, citing US tariffs on imported aluminium and rising energy costs.
Alcoa now expects adjusted EBITDA to range between $3-3.2 billion, compared to its previous forecast of $3.5-3.7 billion.
US President Donald Trump imposed tariffs of 25% on imports of steel and 10% on aluminium on countries including Canada and Mexico and the European Union that went into effect in June.
Alcoa said the tariffs led to an extra $15m in costs in the reported quarter that were mainly levied on aluminium imported from Canada, its biggest supplier.
The company operates three smelters in Canada which were not excluded from tariffs.
Alcoa said it anticipates a negative monthly impact between $12 million and $14 million as long as the tariffs are in place.
Chief executive Harvey said on a post-earnings call with analysts that even if all US curtailed capacity was back online, the US would still need to import 60% of its primary aluminium needs from Canada.
"In short, tariffs will not solve the challenges facing the aluminium industry," he stated.
The company reported adjusted earnings of $1.52 per share, and revenue of $3.58 billion for the quarter ending June 30 that beat Wall Street estimates, according to Thomson Reuters.
Net income was reduced by $22m due to rising oil and gas prices, and electricity prices in Spain, Norway and the Pacific Northwest, the company said.
