Alcoa posts quarterly loss as aluminium prices fall

Published:  10 Jul at 9 AM

Alcoa, the American aluminium producer, has posted a second-quarter loss of $2 million. The announcement comes as the price of aluminium drops to its lowest level in two years. The price of the metal is currently 18 per cent lower than it was last year which has caused Alcoa to see a loss compared to a $322 million profit in the same quarter of 2011.\r\n\r\nHowever, the loss, which meant a nine per cent drop in revenues to $6 billion was not as bad as some analysts had been expecting. Shares in the company gained two per cent.\r\n\r\nThe demand for aluminium has declined as some countries in the eurozone slip back into recession and economic growth in countries such as China and India slows down. Alcoa remains confident that demand for aluminium around the world will grow by seven per cent this year on top of 2011’s 10 per cent growth.\r\n\r\nAlcoa’s chairman and CEO, Klaus Kleinfield, said aluminium prices may be down at the present time but that there was still a strong demand from the markets. He added that the company was concentrating on capitalising on growing demand from the automotive and aerospace industries.\r\n\r\nBroader economic trends have been reflected in Alcoa’s performance as aluminium is needed in a wide variety of manufacturing processes from drinks cans to cars.