Alcoa upbeat despite loss

Aluminium maker Alcoa says its latest quarterly revenue and profit fell, but were better than investors had expected even though prices are at nearly two-year lows, down 20 percent since March.

The company is sticking with its forecast that global aluminium demand will grow by seven percent this year with Chinese demand increasing by 11 percent.

It bases that on the needs of the aerospace and carmaking industries.

Chief Executive Klaus Kleinfeld said low metal prices were a result of the global economic malaise rather than any fault with market fundamentals.

“I want to make one thing crystal clear here, the market is working,” he told analysts on a conference call.

“We do see that people are moving forward with curtailing (production) and responding by slower build as we see in China and that’s clearly a function of the low LME (London Metal Exchange) pricing that we currently have in the market.”

Recent production cuts helped bring the aluminum market into deficit, Kleinfeld said, suggesting prices might now rise according to historical patterns in cyclical metals markets.

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