Alcoa expects lower global aluminium deficit in 2019Volker Karow
Along with the release of its Q2 figures, Alcoa updated its market outlook.
For full-year 2019, the company continues to project a global aluminium deficit, ranging between 1.0 and 1.4m tonnes, down from last quarter’s estimate of a deficit between 1.5 and 1.9m tonnes.
Global aluminium demand growth for 2019 is estimated to range between 1.25 and 2.25%, down from 2 to 3% in the previous quarter, driven by lower demand in both China and the world ex-China due to trade tensions and macroeconomic headwinds. Even so, aluminium inventories, measured in days of consumption, continue to decline and are expected by year’s end to reach levels not seen in more than a decade, since before the global financial crisis in 2008.
In the alumina market, Alcoa projects a global surplus for 2019, ranging between 0.5 and 1.3m tonnes, up from last quarter’s estimate of 0.2 to 1m tonnes. Environmentally-driven Chinese alumina curtailments were outweighed by the combination of a refinery restart in the Atlantic region and lower alumina demand from worldwide smelting production.
The third-party, seaborne bauxite market is expected to have a larger surplus in 2019 ranging between 13 and 17m tonnes, an increase from the previous quarter’s full-year estimate of 8 to 12 m tonnes. The increase is due to higher production in Guinea and Southeast Asia, which is only partially offset by higher demand in China.
Alcoa’s 2019 shipment outlook for bauxite, alumina and aluminium remains unchanged from the prior full-year estimates. Total annual bauxite shipments are expected to range between 47.0 and 48.0m dry tonnes. Total alumina shipments are projected between 13.6 and 13.7m tonnes with anticipated operational improvements and higher year-on-year production. Aluminium shipments are expected to be between 2.8 and 2.9m tonnes.
In the third quarter of 2019, Alcoa expects benefits from higher volumes and lower costs for raw materials and maintenance in the Alumina and Bauxite segments. In the Aluminium segment, the company expects improvements primarily from lower alumina costs.