Key transactions & industry news Weekly Update 05/02/2025

Metals & Mining

Alcoa under review – power outage, and delayed refinery restart cloud Q3 outlook, despite steady Q2 orders. CEO William Oplinger stated that the company has yet to observe any negative impact on bookings due to the tariffs; but could not give a positive outlook for the months to come, citing customer feedback that signals potential challenges ahead. In addition to the tariff pressure, Alcoa is now grappling with a new obstacle and that is power outage in Spain, which has disrupted operations at both its aluminum smelter and alumina refinery. Oplinger also confirmed today that Alcoa’s 60-year-old alumina refinery in Kwinana, Australia, which was closed last year, is unlikely to restart any time soon. With tariff pressures, operational disruptions in Spain, and uncertainty in Australia, Alcoa’s resilience is being tested on multiple fronts.

Primary aluminium production in Q1 2025 grows but at a lower rate – factors uncovered here. The International Aluminium Institute has revealed the world’s primary aluminum production for the first quarter of 2025, highlighting a year-on-year increase of 1.34%. But if compared to the growth rate of last year, it is about a 3% less. The soaring LME aluminium price throughout March 2025 could be a valid reason for the bearish trend of primary aluminum production. Until March 26, 2025, the LME aluminium price stood above $2,600 per tonne, reaching as high as $2,737 per tonne on March 12, driven majorly by global supply concerns amid US tariffs.

Hydro’s Q1 Adjusted EBITDA surges 5x on upstream aluminum strength; Extrusions weakness triggers strategic response. In the first quarter of 2025, Hydro earned the revenue of NOK 57,094 million, which was 20% higher than NOK 47,545 million during the corresponding period of the previous year. On a quarter-on-quarter basis, the revenue witnessed an increase of 4% from NOK 55,057 million. Adjusted EBITDA in Hydro’s aluminum sector was NOK 2,545 million, up by 30% Y-o-Y from NOK 1,965 million and 31% higher Q-o-Q than NOK 1,949 million. In contrast, Adjusted EBITDA earnings from extrusions were 18% less Y-o-Y, totalling NOK 1,174 million in Q1 2025 versus NOK 1,437 million in Q1 2024. Hydro has reported in its annual report that its exposure to the US aluminium tariff is limited due to extensive domestic sourcing and pass-through pricing, with minor cross-border risks.

Transportation & Logistics

Transportation hiring slows to a crawl in April, warehousing sees strong growth. Although employment in truck transportation soared in March as the industry added 7,000 jobs, hiring in transportation slowed to a crawl in April. Truck transportation added just 1,400 jobs in April, seasonally adjusted, for a total of 1,524,500 jobs, representing less than a tenth of a percent increase. The railroad industry put hiring on pause, too, adding just 100 jobs from March to April and bringing its total employment to 153,800 in April, seasonally adjusted. The courier sector lost ~10,000 jobs from February to March, seasonally adjusted, to stand at 1,175,700 jobs in March. April added 8,400 courier jobs to bring the total to 1,184,100.

CN’s first-quarter earnings grow despite impact of severe weather. CN did not see significant changes in traffic flows during the quarter due to the imposition of U.S. tariffs on Canada, Chief Commercial Officer Remi Lalonde says. But CN expects to see an “air pocket” in second-quarter international intermodal volumes due to canceled sailings from Chinese ports, Lalonde says. The drop in container traffic at CN-served ports should not be as steep as what’s expected in the U.S., where West Coast ports are expecting an import cliff as volume from China dries up due to tariffs as high as 145%. About a third of the container volume CN handles at Vancouver and Prince Rupert, British Columbia, are shipments bound for Chicago and elsewhere in the U.S. Midwest. Half of that traffic originates in China.

Energy

Oil stabilises as traders weigh potential US-China trade talks. Oil prices were stable on Friday and heading for a weekly loss, as traders squared positions ahead of an OPEC+ meeting and showed caution over the possibility of a de-escalation of the trade dispute between China and the United States. Brent crude futures were down 14 cents, or 0.23%, to $61.99 a barrel, while U.S. West Texas Intermediate crude futures fell 15 cents, or 0.25%, to $59.09 a barrel.

Others

Trump proposes $163 billion cut to federal budget. U.S. President Donald Trump’s administration on Friday proposed a $163B cut to federal spending next year, which would eliminate more than a fifth of the non-military spending excluding mandatory benefit programs. The proposed budget would raise defense spending by 13% and homeland security spending by nearly 65% from 2025 enacted levels. Non-defense discretionary spending would be cut by 23% to the lowest level since 2017.