Alcoa Corp. sees Chinese cuts in aluminum production returning the global market to “relative balance” as the Asian nation’s supply-side reforms begin to bite.
The largest U.S. aluminum producer reduced its global surplus forecast for the lightweight metal this year as China appears to be holding to its promise to curb capacity to meet pollution-control targets.
“The improvement is mostly due to planned and actual curtailments in Chinese smelting capacity as well as increased Chinese demand,” Alcoa said Wednesday in its third-quarter earnings statement.
China will have a surplus of 1.8 million to 2 million metric tons of aluminum this year, Alcoa said in a presentation accompanying the earnings report. That compares with a July projection for a surplus of 2.2 million to 2.4 million.
As a result, the company projects the global aluminum market is heading to relative balance in a range of a 300,000-ton deficit to a 100,000-ton surplus. In July, Alcoa forecast a 300,000- to 700,000-ton global surplus.
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