US aluminum market in recovery, but customers still cautious: Noranda

The US aluminum market has started to show signs of recovery, Kip Smith, president of Noranda Aluminum said Monday.

"Were in recovery mode, but take your own view how robust that recovery is," Smith said at the Platts Aluminum Symposium in San Diego.

Smith said that the US housing market had improved last year and that total value added housing work in 2012 had shown a year-on-year increase for the first time since the economic downturn.

US housing starts were up 27.6% on the previous year in 2012 and outstanding inventory indicated five months stock of homes on the market, the same level as in 2001, Smith added.

"Global demand is expected to continue to grow," Smith said.

He noted that demand from the consumer durable sector was showing stable growth, as was demand from the electrical sector.

US consumer durables manufacturing increased 8.5% in 2012 on the previous year, while US food, beverage and tobacco manufacturing was up 1.9% over the same period.

"Containers and plastics are showing stable demand and the electrical sector is showing continued growth that is sustainable," Smith said.

He added that the US aluminum market was expected to continue to grow as higher standards of living and increased demand from emerging markets drive demand.

Smith said that the aluminum price was a complicated issue, but that ultimately it would be driven by fundamental demand.

Although the US aluminum market was showing signs of a more stable recovery, Smith said that there was still caution among customers in 2013.

"Our customers remain cautious as we move into the new year," Smith said.