22 Jan

Alcoa Discussed Aluminum’s Demand-Supply Equation

WRITTEN BY Mark O'Hara FEATURED IN Post-Release Earnings Reports

Aluminum’s demand-supply equation

In the long term, underlying demand-supply dynamics tend to impact metal prices. Aluminum isn’t an exception. In this part, we’ll see what Alcoa’s (AA) management had to say about aluminum’s demand-supply equation during its 4Q17 earnings call. First, let’s see what Alcoa had to say about the 2017 market balance.

Alcoa Discussed Aluminum’s Demand-Supply Equation

According to Alcoa, global bauxite and alumina markets (AWC) were balanced in 2017. We should remember that markets are said to be in a state of “balance” when supply keeps pace with demand. Markets are said to be in a “surplus” when supply exceeds demand. When demand outstrips supply, it’s a “deficit.”

2018 outlook

In bauxite (RIO), Alcoa sees an increase in China’s inventory as “Chinese refineries continue to have an appetite for imported bauxite and supported by increased Indonesian exports and continued production growth in Guinea.” In alumina, the company sees a balanced market in 2018. According to Alcoa, “For environmental reasons, we have seen China curtail some refining capacity for the winter heating season between November 15 and March 15, and we anticipate that they will do so again next winter.”

Aluminum

According to Alcoa, global aluminum demand growth was more than 5% year-over-year in 2017. The company expects global aluminum demand to grow 4.25%–5.25% in 2018. Alcoa sees ex-China demand growth to be higher in 2018—compared to 2017. Alcoa’s management also sounded optimistic about capacity curtailments in China. It expects China’s aluminum surplus to be lower in 2018—compared to 2017. Notably, China’s aluminum surplus fuels the country’s aluminum exports (S32) (CENX). Overall, Alcoa expects global aluminum markets to move into a deficit in 2018.

In the next part, we’ll see what Alcoa had to say about China’s supply-side reforms.

Latest articles

Verizon Communications stock (VZ) closed down 2.09% on Tuesday after the leading US mobile carrier reported mixed results for the first quarter of 2019 before the market bell yesterday.

24 Apr

Nokia’s Patent Business Is Put On the Spot

WRITTEN BY Rachel Gunter

Several European auto companies want Nokia’s (NOK) patent business subjected to an antitrust probe.

The first-quarter semiconductor earnings season has begun, and the stock market is showing bullish sentiment as investors buy ahead of earnings releases.

Netflix (NFLX) is working its way through a series of price increases in several markets, including the United States and parts of Europe.

Netflix (NFLX) is aiming to add 14.6 million paying subscribers in the first six months of 2019.

Earlier today, the second-largest US automaker, Ford Motor Company (F), announced a plan to invest $500 million in Plymouth-based automotive company Rivian.