As it announced its fourth-quarter earnings, the company sees global demand growth for the commodity recovering to 7% in 2013 as China’s economic rebound drives demand for aluminium cans, transport and office buildings.
Production cuts and closures carried out this year have helped Alcoa, the largest aluminium producer in the US, to move 4 percentage points down the aluminium smelting cost curve, its chief executive said on Tuesday.
“With production curtailments in Spain and Italy, we have moved down the aluminium cost curve,” chief executive and chairman Klaus Kleinfeld told analysts on a conference call following the release of the aluminium giant’s fourth quarter results.
Reducing production costs is a must to remain competitive in a market which is seeing supply increase dramatically, analysts said.
On the demand side, the growth in the market for aerospace parts will increase by as much as 10% as planemakers face record backlogs, the company said. It also predicted aluminium consumption may climb 19% in China’s heavy-truck and trailer industry, while US commercial building and construction expands for the first time in four years.
“The fundamentals are pretty positive,” Kleinfeld said on a conference call with journalists. “We will absolutely see the rebound” in aluminium prices.
