09 OCTOBER 2014www.todayonline.com
Alcoa sees smaller aluminum market deficit on China smelter restarts
Edited by : AL CIRCLE
1 min read
Alcoa Inc has decreased its estimate for the global aluminum market deficit this year due to smelter restarts in China, the world's No. 1 producer, a senior executive said on Wednesday on a conference call to discuss third-quarter earnings.
The U.S. aluminum producer expects demand to outpace supply by 671,000 tonnes this year, down from a previous estimate of 930,000 tonnes, Chief Financial Officer William Oplinger said.
In July, Alcoa increased its market deficit estimate to 930,000 tonnes due to capacity cuts in China.
Higher aluminum prices have prompted some Chinese smelters to abandon production cutbacks and are seen leading to restarts of other plants, chipping away at what was expected to be the first global deficit after years of oversupply.
A rally in London Metal Exchange futures contracts this year plus record premiums, or charges to obtain physical material, have sharply improved the financial stance of many smelters that were in the red last year.
Aluminum prices surged 27 percent in the first seven months of the year to an 18-month peak. They have since given up some of those gains but are still up about 8 percent this year.
The U.S. aluminum producer expects demand to outpace supply by 671,000 tonnes this year, down from a previous estimate of 930,000 tonnes, Chief Financial Officer William Oplinger said.
In July, Alcoa increased its market deficit estimate to 930,000 tonnes due to capacity cuts in China.
Higher aluminum prices have prompted some Chinese smelters to abandon production cutbacks and are seen leading to restarts of other plants, chipping away at what was expected to be the first global deficit after years of oversupply.
A rally in London Metal Exchange futures contracts this year plus record premiums, or charges to obtain physical material, have sharply improved the financial stance of many smelters that were in the red last year.
Aluminum prices surged 27 percent in the first seven months of the year to an 18-month peak. They have since given up some of those gains but are still up about 8 percent this year.
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