Alcoa Inc has increased its estimate for the global aluminum market deficit this year due to capacity cuts in China, the world's No. 1 producer, a senior executive said on Tuesday in a conference call to discuss second-quarter earnings.
The U.S. aluminum producer expects demand to outpace supply by 930,000 tonnes this year, up from its previous estimate of 730,000 tonnes, William Oplinger, Executive Vice President and Chief Financial Officer, said.
The forecast would not include the more than 5 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 cast a long shadow over the global primary aluminum market, pressuring exchange prices to levels close to or below breakeven for many big smelters in recent years.
Oversupply in alumina, a key raw material for making aluminum, will fall to an estimated 800,000 tonnes from 2.2 million tonnes expected previously due to lower output from India and higher imports from China, he said.