Alcoa sees mixed aluminium markets

Reuters quoted Alcoa Inc as saying that auto industry demand for aluminium is expected to improve this year but the aerospace, construction and gas turbine markets for the metal will decline.

America's largest aluminium producer also expects global consumption of the metal, especially by China to increase in 2010.

The company said that "In 2010, we expect market conditions for aluminium products in certain end markets, particularly automotive and commercial transportation to improve. Other markets, including aerospace, building and construction and industrial gas turbines are expected to decline."

Alcoa said the SEC that it projects an increase in the consumption of aluminium, especially in China. But increases in energy prices and continued currency movements are expected to be a challenge.

Mr Klaus Kleinfeld chairman & CEO Alcoa noted that 2009 was a challenging economic environment with aluminium prices crashing, broad demand destruction and a credit crunch that crippled our ability to initiate growth. We adopted a holistic response to this situation by initiating various actions aimed at reducing costs, improving cash levels and preserving liquidity.

He said that those actions included curtailing additional refinery and smelter capacity which necessitated layoffs, identifying procurement efficiencies, reducing the quarterly dividend and issuing new equity and debt instruments.