Alcoa Trims Growth Forecast For '08 Aluminum Demand

Alcoa Inc. (AA) is forecasting 8.5% growth in worldwide primary aluminum consumption this year, a decline from the company’s prior estimate of more than 9%.

The biggest change is in North America. In January, Alcoa forecast 0.8% growth in North America aluminum consumption this year, but it now projects a 5% dip.

In Europe, Alcoa said it now expects consumption to climb 1.1% this year, off from its January estimate of 2.1% growth.

But despite the reduced outlooks in North America and Europe, Alcoa executives on Monday were quick to express confidence in the sector overall.

"Weak end markets in North America and Europe are not affecting the overall strong aluminum fundamentals," said Chuck McLane, Alcoa’s chief financial officer, speaking on a conference call with analysts after the company released its earnings report.

Among other things, McLane noted that inventories remain low in North America, saying there will be an immediate need to restock once the economy improves.

Alcoa also continued to project strong growth this year in many other markets. China’s consumption is expected to climb 24%, in line with Alcoa’s previous forecast.

Meanwhile, Alcoa said it anticipates growth in aluminum consumption to average about 6% over the next decade, which the company said is about even with the average annual growth rate over the previous decade.

The aluminum giant forecast 2008 worldwide aluminum consumption of about 41.23 million metric tons, up from 38 million last year. In January, however, Alcoa estimated worldwide consumption at about 41.5 million metric tons this year.