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Alcoa Corp., a leading aluminum producer in the US, is being squeezed by higher energy costs and lower aluminum prices, which is likely to decrease the company’s third-quarter earnings.

Due to falling aluminum prices, rising raw material costs, higher energy costs, especially in Europe, as well as operational issues in Australia, Alcoa foresaw a tougher outlook in the third quarter.

William F. (Bill) Oplinger, Executive Vice President and Chief Financial Officer for Alcoa, said that aluminum prices have dropped but raw material prices are still high. He also mentioned that the global demand is uncertain, and the biggest aluminum consumer China has weakened, but demand in North America has remained quite firm.

Alcoa’s CEO Roy Harvey said Europe is still in high uncertainty, while the long-term demand outlook for aluminum is strong.