Rio Tinto Says Aluminum Demand to Fall 12% This Year

June 11 (Bloomberg) -- Global aluminum demand will fall 12 percent this year to 33.5 million tons because of a slump in housing starts and car purchases, said Carmine Nappi, a director of industry analysis at Rio Tinto Group. Builders and automakers stopped buying metal earlier this year because of a slump in demand, Nappi said today at a seminar in Santiago. Aluminum demand fell 25 percent in March from the year-earlier period, he said. Rio acquired Canada’s Alcan Inc. in 2007 for $38.1 billion to create the world’s largest maker of aluminum, and its base ingredient bauxite. A recovery in global industrial production would stem declines in aluminum prices that have fallen 43 percent in the past 12 months. “The market is recovering,” Nappi said. “There has been some turning point.” U.S. industrial production “will reach a trough in the next month or two” Nappi said. Demand in China started to recover since February and is the only part of the world where it isn’t contracting, he said. Global demand in 2010 will increase 16 percent to 38.7 million tons, he said. Demand peaked in the second quarter of 2008 at an annualized rate of 40 million tons, he said. To contact the reporter on this story: Matthew Craze in Santiago at mcraze@bloomberg.net.