Alcoa forecasts rising Al, bauxite supply

US-based primary aluminum smelter Alcoa forecast growing global supply of the commodity in 2019 on lower projected demand growth and shrinking deficit expectations.

Alcoa revised its 2019 global aluminum deficit prediction downward to 1.5mn-1.9mn tonnes (t) in its earnings released today from 1.7mn-2.1mn t in the prior quarter. The company cut back demand estimates to 2-3pc growth for 2019 from 3-4pc growth.

Alumina is expected to remain in a global surplus of 0.2mn-1mn t, unchanged from the prior quarter's projection, while the company updated its expectations for global bauxite supply to a 8mn-12mn t surplus from 7mn-11mn t.

Alcoa's first quarter aluminum shipments fell by 10pc to 709,000t in the first quarter from a year earlier. Alumina shipments were down by 2pc at 2.33mn t and bauxite shipments were up by 9pc at 1.2mn dry metric tonnes.

In February, the company curtailed its Avilés and La Coruña plants in Spain, causing the 10pc discrepancy in primary aluminum shipments between the first quarter of 2019 and the first quarter of 2018.

Alcoa is maintaining the smelters in "restart condition" through 30 June for any prospective buyers.

First-quarter revenue fell by 12pc to $2.7bn from a year earlier, as the company posted a $199mn loss compared with a $195mn profit in the first quarter of 2018. The loss reflects a $156mn charge related to the Spanish curtailments.