Alcoa posts fourth quarter profit

 
City A.M. Reporter
Alcoa, the largest US aluminium producer, reported a fourth-quarter profit and projected a 12 per cent rise in demand for the metal in 2011, driven by aerospace and auto manufacturing.

Alcoa said income from continuing operations was $258m (£166m) compared with a loss of $266m in the same quarter of 2009.


"Pretty much every one of our end markets is improving," chief executive Klaus Kleinfeld told analysts on a conference call when asked about his projection for a 12 per cent global increase in aluminium demand.

"We do not expect the substantial growth to come from the US and Europe. We believe that those emerging economies will accelerate and there the driver pretty much is infrastructure building, and all the other end markets that we are seeing, from automotive to packaging to building and construction."

Kleinfeld said Alcoa expects demand growth in the aerospace sector to increase seven per cent in 2011 and 5-11 percent in the auto industry.

The beverage can sector was likely to be flat to two per cent higher this year, but Alcoa sees commercial construction industry demand for aluminium increasing two per cent to three per cent. In fact, he said the building sector, which was particularly badly hit by the recession, appeared to be improving.

"When you look at the monthly contracts awarded and the construction starts ... it looks really like a bottoming out. It is not dropping further.

"So it could well be, if you take an optimistic perspective, that we might be seeing the bottoming out of this market here in the US."

Analyst Curt Woodworth of Macquarie Research said Alcoa's outlook was "phenomenally strong and probably conservative."