Derivatives and Other Financial Instruments (Tables)

6 Months Ended

Jun. 30, 2021

Fair Value Disclosures [Abstract]

Schedule of Detail for Level 1, 2 and 3 Derivatives

The following tables present the detail for Level 1, 2 and 3 derivatives (see additional Level 3 information in further tables below):

	June 30, 2021				December 31, 2020
	Assets		Liabilities		Assets		Liabilities
Level 1 and 2 derivative instruments	$	23	$	24	$	21	$	7
Level 3 derivative instruments		5		1,415		—		838
Total	$	28	$	1,439	$	21	$	845
Less: Current		25		236		21		103
Noncurrent	$	3	$	1,203	$	—	$	742

	2021						2020
Second quarter ended June 30,	Unrealized (loss) gain recognized in Other comprehensive (loss) income			Realized (loss) gain reclassed from Other comprehensive (loss) income to earnings			Unrealized (loss) gain recognized in Other comprehensive (loss) income			Realized (loss) gain reclassed from Other comprehensive (loss) income to earnings
Level 1 and 2 derivative instruments	$	6		$	(3	)	$	22		$	(1	)
Level 3 derivative instruments		(394	)		(60	)		(536	)		(14	)
Noncontrolling and equity interest		(9	)		(4	)		1			2
Total	$	(397	)	$	(67	)	$	(513	)	$	(13	)

	2021						2020
Six months ended June 30,	Unrealized (loss) gain recognized in Other comprehensive (loss) income			Realized (loss) gain reclassed from Other comprehensive (loss) income to earnings			Unrealized gain (loss) recognized in Other comprehensive (loss) income			Realized (loss) gain reclassed from Other comprehensive (loss) income to earnings
Level 1 and 2 derivative instruments	$	(8	)	$	(3	)	$	(7	)	$	(15	)
Level 3 derivative instruments		(694	)		(115	)		331			(22	)
Noncontrolling and equity interest		2			(1	)		15			(1	)
Total	$	(700	)	$	(119	)	$	339		$	(38	)

Schedule of Quantitative Information for Level 3 Derivative Contracts

The following table presents quantitative information related to the significant unobservable inputs described above for Level 3 derivative instruments (megawatt hours in MWh):

	June 30, 2021		Unobservable Input	Unobservable Input Range
Asset Derivatives
Financial contract	$	2	Interrelationship of	Electricity (per MWh)	2021: $51.94
			forward energy price and the Consumer Price Index
Financial contract		3	MWh of energy needed	Electricity (per MWh)	2021: $47.27
(undesignated)			to produce the forecasted		2021: $35.06
			mt of aluminum	LME (per mt)	2021: $2,523
					2021: $2,513
Total Asset Derivatives	$	5
Liability Derivatives
Power contract	$	290	MWh of energy needed	LME (per mt)	2021: $2,520
			to produce the forecasted		2027: $2,379
			mt of aluminum	Electricity	Rate of 4 million MWh per year
Power contracts		1,105	MWh of energy needed to produce the forecasted mt of aluminum	LME (per mt)	2021: $2,520 2029: $2,456 2036: $2,752
				Midwest premium (per pound)	2021: $0.2850 2029: $0.2750 2036: $0.2750
				Electricity	Rate of 17 million MWh per year
Power contract		2	MWh of energy needed to produce the forecasted mt of aluminum	LME (per mt)	2021: $2,520 2021: $2,525
				Midwest premium (per pound)	2021: $0.2850 2021: $0.2950
				Electricity	Rate of 2 million MWh per year
Power contract (undesignated)	18		Estimated spread between the 30-year debt yield of Alcoa and the counterparty	Credit spread	2.45%: 30-year debt yield spread 5.32%: Alcoa (estimated) 2.87%: counterparty
Total Liability Derivatives	$	1,415

Schedule of Fair Values of Level 3 Derivative Instruments Recorded as Liabilities

The fair values of Level 3 derivative instruments recorded in the accompanying Consolidated Balance Sheet were as follows:

Asset Derivatives	June 30, 2021		December 31, 2020
Derivatives designated as hedging instruments:
Current—financial contract	$	2	$	—
Total derivatives designated as hedging instruments	$	2	$	—
Derivatives not designated as hedging instruments:
Current—financial contract	$	3	$	—
Total derivatives not designated as hedging instruments	$	3	$	—
Total Asset Derivatives	$	5	$	—
Liability Derivatives
Derivatives designated as hedging instruments:
Current—power contracts	$	213	$	94
Current—financial contract		—		1
Noncurrent—power contracts		1,184		720
Total derivatives designated as hedging instruments	$	1,397	$	815
Derivatives not designated as hedging instruments:
Current—embedded credit derivative	$	3	$	4
Noncurrent—embedded credit derivative		15		19
Total derivatives not designated as hedging instruments	$	18	$	23
Total Liability Derivatives	$	1,415	$	838

Fair Value Assets Liabilities Measured On Recurring Basis Unobservable Input Reconciliation Text Block

The following tables present the reconciliation of activity for Level 3 derivative instruments:

	Assets		Liabilities
Second quarter ended June 30, 2021	Financial contract		Power contracts			Financial contract			Embedded credit derivative
April 1, 2021	$	—	$	1,047		$	15		$	18
Total gains or losses included in:
Sales (realized)		—		(67	)		—			—
Cost of goods sold (realized)		—		—			7			—
Other income, net (unrealized/realized)		3		—			(1	)		1
Other comprehensive (loss) income (unrealized)		2		417			(21	)		—
Other		—		—			—			(1	)
June 30, 2021	$	5	$	1,397		$	—		$	18
Change in unrealized gains or losses included in earnings    for derivative instruments held at June 30, 2021:
Other income, net	$	3	$	—		$	(1	)	$	1

	Assets		Liabilities
Six months ended June 30, 2021	Financial contract		Power contracts			Financial contract			Embedded credit derivative
January 1, 2021	$	—	$	814		$	1		$	23
Total gains or losses included in:
Sales (realized)		—		(107	)		—			—
Cost of goods sold (realized)		—		—			(8	)		—
Other expenses (income), net (unrealized/realized)		3		—			(1	)		(5	)
Other comprehensive (loss) income (unrealized)		2		690			6			—
Other		—		—			2			—
June 30, 2021	$	5	$	1,397		$	—		$	18
Change in unrealized gains or losses included in earnings    for derivative instruments held at June 30, 2021:
Other expenses (income), net	$	3	$	—		$	(1	)	$	(4	)

Schedule of Carrying Values and Fair Values of Other Financial Instruments

The carrying values and fair values of Alcoa Corporation’s other financial instruments were as follows:

	June 30, 2021				December 31, 2020
	Carrying value		Fair value		Carrying value		Fair value
Cash and cash equivalents	$	1,652	$	1,652	$	1,607	$	1,607
Restricted cash		3		3		3		3
Short-term borrowings		77		77		77		77
Long-term debt due within one year		1		1		2		2
Long-term debt, less amount due within one year		2,216		2,408		2,463		2,692