Alcoa CEO sees sustainable, slow recovery-magazine

FRANKFURT, Sept 17 - The world economy is now on its way to sustainable recovery but the way up will be a slow one, the chief executive of aluminium producer Alcoa Inc told a German magazine on Thursday. "The freefall has ended... I now see again a series of positive signs," Klaus Kleinfeld told Capital. "I believe the uptrend is sustainable but I do not expect that we will have a quick, jerky upward movement. I believe the level will stabilise and then gradually proceed further up." He said the aluminium price is now at $1,900 per tonne after having fallen as low as $1,100 per tonne. "This increase is a completely important indicator," he added. A second indicator is that distributors' inventories are empty, with inventory depletion reaching levels "never seen since Alcoa was founded". "More and more traders are asking for our delivery conditions. They recognise that they are unable to deliver as soon as the demand starts. They are afraid now that they will miss the first surge of demand," Kleinfeld said. He said the usual dent seen during the summer break has not materialised to a large extent. "There is not a region in the world, not even in Europe, where the holiday effects have always been the strongest, where we see a slackening in demand," he said. Kleinfeld said the recovery has already started in Brazil, and he expects India will post growth again this year. China is for him a "phenomenon", having put out the most intelligent economic stimulus programme, and will achieve its 8 percent growth target for this year. He said there are also positive signs emerging in the United States, citing an increase in housing sales, orders for manufactured goods and car production.