<article><p class="lead">US primary aluminum smelter Alcoa expects growing demand for aluminum in 2020 after a contraction in 2019 that contributed to its $1.1bn loss for the year.</p><p>Alcoa projects global aluminum demand to grow between 1.4-2.4pc, improving from a 0.2-0.4pc decline in 2019. The company expects more balanced supply-demand dynamics for alumina and bauxite raw materials in 2020, even as its view that primary aluminum will swing to a surplus.</p><p>The global market balance for aluminum is projected between a 0.6mn-1mn metric tonne (t) surplus in 2020, reversing a 0.9mn-1.1mn t deficit in 2019.</p><p>Shipments of bauxite are expected to rise as much as 3pc in 2020 to between 48mn-49mn dry metric tonnes (dmt) from a year earlier, while alumina volumes edge up as much as 1pc to 13.6mn-13.7mn t. Alcoa's outlook for primary aluminum shipments was up by as much as 8pc to 3mn-3.1mn t.</p><p>The company does expect weaker results in the first quarter driven by lower prices and seasonally lower volumes. </p><p>In addition, Alcoa kicked off a review of existing assets to "drive lower costs and sustainable profitability," which in part resulted in the sale of its waste treatment facility in Gum Springs, Arkansas on 2 January.</p><p>Alcoa's primary and flat-rolled aluminum shipments declined by 12pc to 718,000t in the fourth quarter from the same year earlier period. Full-year shipments totaled 2.9mn t, down by 13pc from 2018.</p><p>Average realized aluminum prices in the fourth quarter dropped by 13pc from the prior year to $2,042/t. Full-year average prices declined throughout 2019, falling by 14pc to $2,141/t from 2018.</p><p>Primary aluminum production in the fourth quarter fell by 7pc from a year earlier to 535,000t. Full-year production fell by 5pc year over year to 2.1mn t.</p><p>Quarterly third-party bauxite shipments fell by 6pc to 1.5dmt, while alumina volumes rose by 4pc to 2.5mn t.</p><p>Annual bauxite shipments increased to 6.2mn dmt from 5.7mn dmt. Shipments of alumina rose by 2pc to 9.5mn t in 2019.</p><p>Full-year bauxite production totaled 47.4dmt, a 3pc increase from 2018. Alumina production climbed by 3pc to 13.3mn t in 2019.</p><p>Revenues declined by 27pc to $2.4bn in the fourth quarter from a year earlier, while the company reversed a $51mn profit, losing $303mn. For 2019, Alcoa lost $1.1bn compared to a $250mn profit in 2018.</p><p class="lead"><i>By Zach Schumacher</i></p></article>
