Alcoa still sees global aluminum deficit for FY19
The company's 2019 shipment outlook for Bauxite, Alumina and Aluminum remains unchanged from the prior full-year estimates. Total annual bauxite shipments are expected to range between 47.0 and 48.0 million dry metric tons. Total alumina shipments are projected between 13.6 and 13.7 million metric tons with anticipated operational improvements and higher year-on-year production. Aluminum shipments are expected to be between 2.8 and 2.9 million metric tons. 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 Aluminum segment, the Company expects improvements primarily from lower alumina costs. For full-year 2019, Alcoa continues to project a global aluminum deficit, ranging between 1.0 million and 1.4 million metric tons, down from last quarter's estimate of a deficit between 1.5 million and 1.9 million metric tons. Global aluminum demand growth for 2019 is estimated to range between 1.25 percent and 2.25 percent, down from 2 percent to 3 percent 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, aluminum 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 500 thousand metric tons and 1.3 million metric tons, up from last quarter's estimate of 200 thousand metric tons to 1 million metric tons. 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 million and 17 million metric tons, an increase from the previous quarter's full-year estimate of 8 million to 12 million metric tons. The increase is due to higher production in Guinea and Southeast Asia, which is only partially offset by higher demand in China.