Shares of Alcoa are down 1.3% in the premarket after earnings, largely due to implementation challenges but the company paints a strong picture of global demand for the business economy .
Revenue rose 34.3% in the year so there is some strength looking back but going forward, the conference call pointed to continued resilience.
“Global aluminum demand remained stable in the fourth quarter. European and North American demand continues to be supported by the packaging and electrical sectors,” said William Oplinger, Alcoa Corporation President and Chief Executive Officer. “Aluminum demand outside of China is expected to rebound, with North America and Europe supported by higher real incomes and lower average interest rates year-over-year. “
In bauxite, they noted all-time high prices and in alumina, they indicated a tight market.
“In alumina, prices reached an all-time high in the fourth quarter due to a tight market on lower-than-expected supply … competition for aluminum shipments.”
In terms of sectors, here's where they see strength:
“We continue to see strong demand in packaging and electrical conductor and electrical distribution,” Oplinger said.
Regarding China, he notes that it is running into capacity constraints and that there is good demand growth, despite the poor report on the Chinese economy.
“China saw growth in all end uses except building construction, leading to strong growth in primary aluminum demand in 2024,” he said.
In the US, he was optimistic about transportation.
“In the US, the transportation and automotive markets are showing signs of recovery, supported by real income growth and economic stability,” he said.
Finally, Oplinger pointed out the problems with possible tariffs on Canada, which is a major exporter of aluminum to the US.
“Tariffs on Canadian aluminum imports to the US would pose a threat to US industrial competitiveness… It is likely that trade flows would be affected so that US aluminum imports would increase from countries like the Middle East and India.”
Alcoa shares every day
