Conference Transcript - AA 2026-06-10

Tim Natanas, Analyst — Wells Fargo

Thanks for joining. I'm joined by Molly Behrman, the CFO of Alcoa. Today we're being webcast, so game face on. Anyway, I'm Tim Natanas, metals and mining analyst and building materials analyst here at Wells Fargo. We are delighted to include Alcoa in our industrials and materials conference this year. and i'm going to kick off with a question about the quarter so of course we're entering into alcoa's and other quiet period and we're finalizing the second quarter so any updates on what you're

Molly Beerman, CFO

seeing at this point would be great thank you thanks tim thanks everyone for joining us so alcoa is having a strong second quarter really focused on operating safely and stability so we can deliver the metal tons and realize the high prices that we're seeing obviously the middle east conflict is top of mind you see those supply constraints showing up in the high lme high premiums and the competition that's going on in the regional premiums as they're competing for those scarce tons we do have a couple items to update on our second quarter performance specifically um i'd like to call out that in the alumina segment we are now expecting additional fuel costs of 15 million at our salui refinery related to higher pricing caused by the conflict higher production costs of 30 million at our panjara refinery as production instability was further complicated by lng supply disruption from cyclone norel we estimate that panjara's third party shipments will be reduced by about 120 000 metric tons in the second quarter versus the first alumina costs and the aluminum segment are now expected to be favorable by 10 million additionally in the presentation posted to our website this morning we have updated business considerations covering the items just mentioned and we've added a bullet in a footnote to our sensitivity slide related to the impacts of lme-linked power contracts and san cyprian metal hedge volumes on our lme sensitivities for revenue our ebitda sensitivities already include the impacts of these lme-linked contracts however the linkage impacts our revenue recognition as those contracts are hedged against our sales for accounting purposes so you will see our annual revenue sensitivity is 40 million per hundred dollar change in LME okay so trying to

Tim Natanas, Analyst — Wells Fargo

respond to any of that live I wanted to say if Illumina shipments are are they lost or deferred at pinjara on the Illumina side I would say primarily we

Molly Beerman, CFO

will try to make up the volumes for the rest of the year when we'll have to update that at the at the end of the second quarter. And in light of the not ideal Illumina

Tim Natanas, Analyst — Wells Fargo

prices, the impact of those tons is probably more limited than than people might fear. I think it

Molly Beerman, CFO

is limited now. But I wanted to give the guidance for revenue purposes. I completely appreciate

Tim Natanas, Analyst — Wells Fargo

that. I'm just trying to think about if that were aluminum, I would be a little more worried. But Illumina is not not doing that great here. So are you overall profitable in Illumina? I mean, is that is that still going to be a hit but a small one or or how do you think about that our

Molly Beerman, CFO

alumina segment is very pressured right now so the alumar refinery is still profitable it's running extremely well hitting record production great uh cost absorption cost control there that refinery also has the benefit of the atlantic premium which is about thirty dollars per metric ton however our refineries in western australia are really challenged remember they're running the poor bauxite quality there so under significant cost pressure at this low api so the segment as

Tim Natanas, Analyst — Wells Fargo

a whole uh will be uh underwater okay so less production at losses i guess is something to factor yes okay just wanted to call that out um all right but then some of the other items are some cost pressures the tariff costs we kind of already bake in I think so that's not necessarily incremental and then some so net net unfavorable total versus

Molly Beerman, CFO

prior guidance 45 million okay perfect think of that really is the 15 at the fuel oil at salary and then the 30 million at panjara gotcha okay these

Tim Natanas, Analyst — Wells Fargo

are really helpful updates I think we were expecting some cost pressure because costs have been on the rise it it seems kind of strange to start out talking about high costs when the much bigger picture is the very high prices of aluminum so just maybe it's taken a step back to to put that in context but part of the reason for the higher price and aluminum and the higher cost is all related to the Strait of Hormuz so maybe for people that are less familiar with the aluminum story and for the Alcoa there's what nine percent of supply of course comes from the Middle East and about 7% is vulnerable and maybe more than half of that is actually disrupted and feel free to correct me at all on any of that. Officially announced about

Molly Beerman, CFO

two and a half million metric tons but we do believe it's probably higher than that. You know we serve customers in the region. We ship about four million metric tons of alumina into the region. We are assisting our customers now with redirecting some of those tons outside of middle east primarily into china all of those contracts are on api so there's really no impact to us but our customers in the region they have long-term supply agreements with us they're interested in retaining those contracts so they're continuing to accept the vessels we obviously want to have a very strong relationship continuing with them so we're helping them to adjust schedules vessels, size of the vessels, destinations, but the Illumina is still flowing from our perspective even though it's not going into the Middle East right now.

Tim Natanas, Analyst — Wells Fargo

Okay, so Alcoa is an aluminum producer, but it's net long Illumina, an even longer bauxite. And so we're going to start bad news, good news maybe, but on the Illumina side, we've expressed concern and talked to you about this on the side that the Illumina to the Middle East, which is, remind us how much of that is, if your Illumina sales?

Molly Beerman, CFO

4 million of our 12 million shipments is going into the Middle East.

Tim Natanas, Analyst — Wells Fargo

But we've been kind of surprised to see that that price of Illumina has been fairly resilient. And it's been somewhat on the customers to figure out what to do with those shipments. Is that fair?

Molly Beerman, CFO

Yeah, that's fair. And what you're seeing now is the Illumina, or I should say the smelters in the Middle East are being creative about how to get Illumina in. So some of them are bringing it in through the port in Oman. they're having it bagged and then on truck or rail up to the to the smelters we understand that modern is providing some supply so they're there they are getting Illumina we think that is supporting the price not to go below the $300 per ton but that that seems to be the situation that we're in now as we look at Illumina obviously the market is oversupplied we have not seen that much capacity come offline recently, maybe about 4 million metric tons, primarily in China. At this level of API, we expect that 45 to 50% of the global refiners outside of China are underwater.

Tim Natanas, Analyst — Wells Fargo

I think that's been the case now for a while. If I remember your charts on your slides, like half the alumina supply has been underwater, but the cost of production of alumina has gone up. so even though the price is up there's still the same amount underwater um i think you've been clear that alcoa doesn't intend to shut any of its alumina capacity but are there other suppliers that you would expect that are higher costs that may need to shut yeah i i don't

Molly Beerman, CFO

necessarily want to speak for the others um as look at ours as i mentioned al-yamar is still profitable panjara and wager up our western australia they had traditionally been first quartile assets we are not looking at curtailing them now during this short term you don't want to give up your staffing you don't want to give up your routines obviously if the market changes dramatically we could revisit that but we fully expect those refineries are going to return to first quartile when they get the mine approvals and we're returning to the high bauxite quality so we're not going to plan to curtail at this point and then in spain you can't but you could

Tim Natanas, Analyst — Wells Fargo

exit spain hypothetically at the end of 2027 is that so in spain we're honoring the viability

Molly Beerman, CFO

agreement that we have with the workers which required us to restart the smelter we completed that in april uh it's running extremely well we've got a great team there they really know how to operate the asset um on the refinery we don't have the same commitment but we do need the supply of alumina into the into the smelter so we have to run through 2027 after 27 we expect to have more options on both sides of the facility there we're really working on productivity and cost savings we have a goal to reach what we call cash neutrality by the end of 27 that means that any cash generated by the smelter is fully covering the refineries operating losses as well as the capex projects that we have going on there we do have a residue storage area that needs capex whether we run or close so that work is underway but again beyond 27 we think we're going to have much more optionality and we will no decisions are made at this point but we'll be working on the costs until

Tim Natanas, Analyst — Wells Fargo

then these aluminum prices probably make the combined spain package look a bit more attractive

Molly Beerman, CFO

i would imagine as well yeah i mean the smelter is really doing well um and if you look at so in 26 the production that we're recording now will also get a co2 compensation payment at the end of 27 for that and that looks to be about 75 million so the smelter is going to generate some cash but again the refinery is really uh incurring significant losses so finishing up on

Tim Natanas, Analyst — Wells Fargo

the Illumina discussion. Recently, Guinea's been kind of taking a different stance toward its bauxite reserves than trying to constrain them, I think, to the benefit of bauxite producers and potentially driving up the Illumina price for those who don't have bauxite could maybe push them over the edge, I suppose. How do you see that dynamic or how could it impact Alcoa?

Molly Beerman, CFO

so the guinea minister of mines has communicated that he would like to have export restrictions what this actually means they haven't formally introduced the mechanics to monitor that but it's really reminding producers to operate within your approved quota so we do if you look at the data it appears that at least two of the of the miners there have exceeded their quotas probably about by about 20 to 30 million metric tons a year now we participate in Guinea through our joint venture CBG we are operating at quota so we don't believe this will impact us but clearly the government wants to wants to control the exports and try to keep the bauxite price at a healthy level I think we've talked about

Tim Natanas, Analyst — Wells Fargo

some of the challenges enough and I want to talk about the aluminum price because this is a very unique situation and we heard from century yesterday in a very confident manner about tariffs. So we'd love to get your perspective that last week in Chicago, Harbor aluminum told us it's going to 4500. I want to put you on the spot with the forecast, of course, but maybe, you know, how do you see the stickiness of some of these factors like the perfect storm of, you know, the Iran, not to celebrate the Iran war, of course, but the constrained supply and the higher costs of production and what what you're well aware of in the market now.

Molly Beerman, CFO

Well, I won't make any predictions on the price. As you look at when we came into 2026, the aluminum market was already tight. I mean, we saw that. We operate primarily in North America and Europe, and both of those deficit markets, we had a very strong order book for the year already. But then when the conflict struck and we saw the over two and a half million metric tons of capacity come offline, you see the response in the LME. you see the regional premiums not only the Midwest but you see now the competition for tons and all of the regional premiums are up reflecting that scarcity inventories at record low levels globally even though there seems to be some supply in China that's not making its way out because of that export tariffs and and taxes there that are disincenting that so yeah we are in a tight market as we're talking to our customers in north america they're really trying to secure supply for the rest of the year and some of them even talking into 27 because they're worried about the middle east supply coming back online in europe the order book is also strong although the european customers they contract every quarter so they don't have quite the same level of urgency but strong, strong books. And for us, we've been able to convert more of our sales from P1020 commodity grade, where you're not getting the product premium into value add product. And so we're seeing an uplift there that gives us an extra premium, helping, helping earnings.

Tim Natanas, Analyst — Wells Fargo

In my 15 years of covering you, I've never seen anything like this. I don't know if your history in aluminum gives us any context of what happens in a market where you have this level of shortage, or how do you think about how this plays out? I wish I had a crystal ball to see.

Molly Beerman, CFO

Again, I still believe in the long-term dynamics of aluminum, and I think we're going to have strong markets into the future. You know, I do hope that Middle East gets resolved, the conflict gets resolved for the sake of everyone there, but I don't think that really impacts the long-term view of aluminum i think we're going to continue the the stronger for longer and the tightness you just don't see the uh smelting capacity coming online with any kind of um you know mass it's very controlled and what we see coming online in indonesia uh isn't going to be enough to fulfill the demand uh so we're going to be probably in a deficit for a while yeah it might

Tim Natanas, Analyst — Wells Fargo

be interesting to get your explanation of why aluminum smelters don't restart quickly. I don't know about how to think about a missile hit, but even before that, when it was like Kutaloom was going to be down just because of the LNG supply when we talked last, it was helpful to get some context of why aluminum smelters don't restart with a switch. Maybe you can explain that a bit.

Molly Beerman, CFO

So if you are curtailed and in what we call an uncontrolled fashion, like you lost your power, you were the pot line was struck you didn't have a chance then to drain the pot so to take all the molten metal out remove your anodes really prepare the pot for an efficient restart so ega's um emol smelter went down uh we don't know the exact circumstances of the hit there but it wasn't uncontrolled that's 1.6 million metric tons that will take them at least a year to restart so all of those pots have to be dug out they have to be relined it's a really expensive and time-consuming process now Cotillum and Alba they they curtailed in a controlled way which mean they had the opportunity to slow production drain the pots remove the anodes that will still take them three to six months it's not a flip the switch you've got to turn the pots on slowly you can only add so many per day per week until you get your full pot line running and stable so that's why it takes so much longer and very expensive uh to restart a smelter unlike a refinery which is um i don't want to minimize the effort there but it is more like flip a switch than what you're going to get

Tim Natanas, Analyst — Wells Fargo

on a smelter got it and then i've heard also that um you know the iranian uh smelters we don't have a lot of information on those could be offline uh who knows controlled or uncontrolled to your point And that there may not be enough workers in the region that are have the expertise to do some of this work. So I've heard actually some, you know, at least 12 months on some of those projects. So if we think about the new capacity and you pointed to Indonesia, I think Slavalko might restart now. That's 175,000 tons. I've heard mag seven, maybe we'll see a hundred something thousand tons, but it is it's kind of small numbers. So I think we could be in a shortage situation now for for a bit of time. We haven't heard that much substitution. We heard a bit up in the initial phases, but it does seem like Ford is sticking with aluminum. It seems like the switching is a little more modest. I don't know if you have any updates there.

Molly Beerman, CFO

No, we really don't. I mean, the story previously was the copper to aluminum and we think all that easy stuff has been done. There's probably not too much, maybe another 800,000 tons of substitution there but when you look at aluminum now relative to steel we saw a little bit of substitution again in the in the parts that weren't highly engineered and those that weren't part of the five to seven year auto design but not not too much okay so uh any other areas where

Tim Natanas, Analyst — Wells Fargo

you could see volume come back or anything to kind of uh address this market tightness for the next 12 months that we might be missing is china able to do more volume i've heard not that much but

Molly Beerman, CFO

certainly appreciate your thoughts so our view is that the chinese smelters are running at full capacity now and they may even be over producing they're staying under their license um in terms of they're not adding new capacity uh but we can run over our name plate capacity if we're pushing amperage uh so we do think that they're they're running at full tilt there but again there's difficulty in getting the prime metal out of china with the with the export you saw a little bit come out a little bit more come out i should say in april but not huge huge volumes on one maybe one insight on indonesia we had a team in indonesia about two weeks ago visiting all of the smelters and refineries and what they're seeing there is constrained so certainly the builds are happening and most of the projects have what they call the phase one and the phase two so they're working through phase one but what they're finding is the builds in indonesia are more difficult even though they're using the chinese technology they don't have the same power access they don't have the same infrastructure you know even the the rules of development in country are changing so i think there's more skepticism about phase two or or beyond happening but certainly the phase one you know modest maybe in the deliver our 700,000 metric tons of capacity this year but we think those will happen but it'll be it'll be slower probably than maybe we had been projecting helpful and then to take it down to an alcoa level

Tim Natanas, Analyst — Wells Fargo

you had talked on the last earnings call about ability to produce a bit more across your footprint can you remind us of those values and any um upside there so if you look at the second

Molly Beerman, CFO

quarter, we finished the restart in San Ciprian. Alumar in Brazil is actually running better now. We've added some additional pots there. We had small restarts at Lista in Norway, as well as our Portland smelter in Australia. All of those combined is adding about 20,000 metric tons to the second quarter. Yeah, so that's all baked into our annual guidance that we've given you. We had planned to do those, but I just wanted to call that out. It's important progress and the fact that we got all of that capacity restarted now when we have the higher metal prices bringing in additional earnings in cash. So that gets Alcoa effectively to full

Tim Natanas, Analyst — Wells Fargo

capacity at the lines that you're running, or is there a bit more to do? I know Warwick isn't, that fourth pot line we always talk about isn't running, but at where you are running,

Molly Beerman, CFO

you're effectively full out? Except at Portland. We have a little bit more there. We could look at restarting a couple other hurdles but there'll be a little bit left at Portland that'll still be curtailed okay and then the 50,000 tons

Tim Natanas, Analyst — Wells Fargo

at war all right let's talk about those it seems like I think I think Bill had said a hundred million tons over two years why I know that that's been cannibalized I know and it's not that easy but that seems like a lot if it if you could rebuild a missile hit smelter in a year why does it take two years at

Molly Beerman, CFO

work yeah so when you look at Warwick we have already guided to be a hundred million dollars for that restart it would take us about two years there are long lead items that as we look at you know placing those orders now i wouldn't even have them for a full year and then you start the restart which could take another um you know nine months so that's why we're saying two years if you look at warwick and you just run the numbers in a spreadsheet you'd say absolutely yes go do it however Warwick is a site it's old technology not much automation we have problems staffing three lines you know think about it work in the summer it's a hundred degrees you're standing over a not automated pot that's 1700 degrees it is difficult to maintain full staffing we're really conscious of safety there so we're considering that if we believe that work if we wanted to make that investment we'd also want to look to invest in work for the long term that would be additional investment additional technology needs we need much more improvement to the cast lines there and then lastly we run a coal-fired power plant there for the smelter if we were running all four lines the power plant would be running at full tilt so anytime the power plant needs maintenance then you've got to make sure you can get power access from the grid or attached to the grid because we sell excess power into it but needing to get power you know to cover um you know and it can't be interrupted power for us so there's a lot of complexities to work that make it not just a a spreadsheet exercise um so that

Tim Natanas, Analyst — Wells Fargo

is really helpful context because you know we all sit there behind our screens and do the math and think this makes perfect sense so you know that that's helpful but i guess it does beg the question of so how do you make these capital allocation decisions do you plug in like 3 500 aluminum or 4 500 if you will um and just say like you should just upgrade and renovate i don't know if the right word but retool um all your smelters in the u.s to produce more at lower costs at that level i mean it's it just seems like a challenging exercise i'm curious about how the thought

Molly Beerman, CFO

process is on on those decisions yeah it is both a science and an art um if you look at messina we were just able to so Messina is in upstate New York we were just able to extend our power agreement there great economical price we got a 10-year extension plus two five-year renewals so we're making investments there we're upgrading certain of the equipment we're looking at other projects not yet announced but we think Messina it has long-term power so for us in the US where it's really about power, Tim, though. Where can we get power at rates? And to be economical through all cycles, for us, that's like $35 per megawatt hour. We're competing with data centers that are paying over 100 per megawatt hour. So that's the decision process from a US smelting investment.

Tim Natanas, Analyst — Wells Fargo

Century says that it's worthwhile to build a $6 billion smelter in Oklahoma. So I can imagine it's challenging and they have a different set of assumptions and risk tolerance, perhaps. But no, I do wonder, it's kind of refreshing to hear Alcoa talking about growth over the years. It's been shrinking to grow, we would say. So maybe that's a great pivot to capital allocation, because although we've talked about a lot of challenges, every hundred dollar move in LME is 200 million. uh and so you know these recent prices even with a little pullback are enormous uh in terms of contribution so a high quality problem for you i'd love to hear about how you're thinking about the options and and the you know again risk tolerance you have so at current pricing we absolutely will

Molly Beerman, CFO

be generating uh lots of cash for the rest of the year both in the second quarter as well as through the end of the year as we are looking at capital allocation we're looking at growth projects i'll give you one example we recently announced just a 65 million dollar investment but it is a one example in our motion uh smelter and cast house we're adding some foundry recycled content that is in direct response to our auto customers in europe they have targets for higher recycled content in the autos by 2030 so we're helping them meet that need for us it's the sweet spot of increasing our capabilities to meet a customer need and also get a great return for shareholders so we have other projects like that we're looking at in growth there's m a opportunities that we would look at i will tell you that we're going to stay in aluminum we're not looking to get into copper or lithium or anything else we're going to stay in the aluminum value chain so bauxite through alumina and aluminum we also recognize that we're going to focus where we have the expertise and we're looking for um assets where we can deliver synergies that the shareholders can't get on their own so we're being very disciplined about this we were actually asked to look at um two other transactions that just happened and we said no those don't meet our criteria the returns aren't high enough and so we walked away we're being disciplined about the growth opportunities we're also looking at options for shareholder returns so we've got a 500 million dollar authorization on our share buyback program today we have a very modest quarterly dividend that we believe is payable across all market cycles we can look at that and then we also have options for special dividends i will add that when we think about share buybacks we do not target a share price we simply look at the excess cash on our balance sheet and return it to shareholders when we don't have a way to

Tim Natanas, Analyst — Wells Fargo

deploy it at a higher value okay that's helpful it it'd be refreshing I think people are eager to see some of those returns definitely been a while coming I guess before we delve into that a little bit more I wanted to back up and and talk about canada because i'd be remiss to ignore you have a really strong canadian presence um man governor senator mansion yesterday said that he um that the canadians of course were offered to be the 51st state and and did not like that so it doesn't seem like these tariffs are coming off anytime soon i don't know if you disagree but um the canadian assets are still very attractive for you just curious about any insights you've heard on any progress if i'm

Molly Beerman, CFO

i'm missing something yeah on the on the us and canadian administration you know last fall when we were thought we were close to a deal uh we were very engaged in those conversations we were providing information and data to both sides as they were negotiating that all fell through they couldn't reach a good agreement but this next time around we're really not as engaged in the middle of it so I don't have that many insights to to offer we are glad that they're speaking they did have a US trade sponsored meeting of aluminum companies in Mexico City the left maybe two weeks ago we participated in that a bit more general discussions about how to protect the industry how to facilitate trade within North America, not specific to tariff rates or lowering tariffs or any kinds of quotas, so that was not a part of the discussion.

Tim Natanas, Analyst — Wells Fargo

And it's not a given that you're going to ship Canadian tons to the U.S., so you follow the most attractive price reflected by whatever the regional premiums are?

Molly Beerman, CFO

Yeah, so we run the net back calculations even now. generally that is favoring shipping from our Canadian smelters into the US however you've seen the increase in the Rotterdam premium so our northernmost smelter Baycomo does have good vessel transport over to Europe so some tons could go there on occasion but for the most part they're coming into the US

Tim Natanas, Analyst — Wells Fargo

Okay, helpful. That's my son. All right. So I wanted to just circle back on the capital allocation side because I think, I just want to clarify, I think Bill's been really clear. He's not a fan of the downstream side, would probably stay more upstream. In the past, you've talked about a variety of technological innovations that I think were on the back burner, but having this additional cash, does that make those more attractive or is it more a question of the technologies themselves, if you could address that?

Molly Beerman, CFO

So we continue to be involved in our breakthrough technologies, particularly LSS. LSS at the end of last year had a great achievement uh the first commercial scale cell was uh started and run at rio's almost melter uh that was a successful test of of the first commercial uh we're also supporting uh a demonstration plant so this is happening at rio's arvita site and that's going to be multiple 100 ka cells so rio is primarily the sponsor there they've just recently gotten canadian government support alcoa is producing the electrodes for both of the facilities though and we're participating in all the technical knowledge and know-how so for us we have a pragmatic investment into the lss partnership it's about 50 to 60 million a year that is giving us access to all of the technology and the IP related to it, but we're not fitting the big bill for that. We will not do any ELISIS deployments this decade. We'll look at that into next. But for right now, the technology is working, but it's not yet economical. So there's still some work to do on getting the economics there to support it. But we're pleased with how ELISIS is going. We're pleased with the partnership. It's working well, and we'll continue to fund into the partnership for now. Check and make sure that we don't have any questions

Tim Natanas, Analyst — Wells Fargo

from the audience. Do we have a few more minutes?

Operator

I don't understand why you're no longer involved in those discussions, just because it's not as sensitive because of the crisis in prison, and if you're not going to be strong, so you're staying out of it, or if there's some other reason for it.

Molly Beerman, CFO

So the question is for the webcast. The question is why aren't we involved in the U.S. and canada administrations negotiations now honestly i don't think it has anything to do with um with us per se we were asked to participate last fall i don't know now if they they've already set on alumina maybe they're working on dairy and lumber and other topics um we honestly don't know uh we just know we're not getting the same pool that we got last fall So the question's on our outlook for Panjara going into next quarter. Thank you for asking this because I should have said this. So Panjara is already running better today. We had the instability, it is impacting the second quarter, but as of currently, they're back on track and we would expect them to perform well during the third quarter.

Tim Natanas, Analyst — Wells Fargo

So did the Panjara refinery issue result in fewer tons but also higher costs as a combination then and so reversing that would be more tons but lower costs yes that's what you

Molly Beerman, CFO

can look at it that way yes we absolutely had cost impact this quarter because of the low production so very poor cost absorption I'll ask another

Tim Natanas, Analyst — Wells Fargo

one on scrap I'm fascinated about the secondary market opportunity I feel like if we really wanted to address national security of aluminum we could recycle more and my pitch for cans next year and when we have this conference I'm not drinking oh yeah you're just boycotting it all together i've been to your headquarters i know uh but anyway uh no just curious if secondary is something that you could look at as a as a growth

Molly Beerman, CFO

opportunity as we think about secondary i'm going to go back to that motion example we had an opportunity to deliver recycled content specific to a customer need with good returns i do not see us announcing any big shift into recycling i think we recognize recycling is a completely different business you need volume and mass we're not collectors we're not sorters we we remelt so for us to go into recycling in a big way would be outside of our our knowledge zone now we'll continue to look at opportunities like motion where we can add recycled content um but i don't see us moving into recycling in a big way and we don't honestly fear recycling either because when you recycle you still need the prime content to get to the right quality levels so we think a growth in recycling is still positive for primary aluminum and a lot of applications can't use

Tim Natanas, Analyst — Wells Fargo

recycled material yes okay i think that um wraps it up thanks everyone for joining and And thanks so much to Alcoa for participating today.