Minews - Alcoa sees global aluminum deficit shrinking in 2015

(Minews) - The global aluminum deficit will shrink to 38,000 tonnes in 2015 as more than 5 million tonnes of new capacity partially offsets rising demand, Alcoa said in a presentation on Monday after reporting higher-than-expected fourth-quarter profit.

The estimate for this year would represent a big drop from 948,000 tonnes in 2014.

The company said that 5.1 million tonnes of production capacity would be added in 2015, taking global output to 52.8 million tonnes. Some 4.4 million tonnes of that will come on line in China, the world's top producer and consumer.

Alcoa's supply-and-demand forecast would not include the more than 4 million tonnes stored in London Metal Exchange-registered warehouses and a similar tonnage of off-market inventory estimated to be held outside of the LME network.

Those stockpiles have pressured exchange prices to levels close to or below break even for many big smelters in recent years.

The drop in the deficit is expected despite the U.S. aluminum producer's expectations for 7 percent growth in aluminum demand in 2015, the same pace at which it says demand grew in 2014.

Three-month aluminum on the London Metal Exchange has fallen 10 percent since the beginning of December, trading around $1,800 per tonne.