Alcoa, the largest US aluminum producer, posted a stronger-than-expected second-quarter profit and raised its estimate for global aluminum consumption, sending its shares up 3 per cent.
The company, whose results are often viewed as a bellweather of the US economy, cited strength in several industrial sectors - particularly in packaging, commercial transportation and building and construction. It also raised its estimate for aluminum consumption this year, even as metal prices have been falling recently.
Chairman and chief executive Klaus Kleinfeld told Wall Street analysts that strong industry fundamentals were expected to drive demand for aluminum in the next ten years with an average growth rate of 6 per cent per year.
"You see robust consumption growth in places like China, Brazil, India, modest increases in North America and Europe.
"There's a lot of very positive indications there of a real recovery in almost all of these markets," he said on a conference call. "But I believe that the biggest risk is still the volatility that could potentially come from financial markets." Asked about Alcoa's mid- to long-term strategy, Mr Kleinfeld said: "Obviously, we will continue to do cost-cutting, obviously, we will continue to see end-markets picking up.
"We will have a seasonal decline ... like we currently see in Europe, for instance. (But) order books - even in Europe, look very good."
Based on the improved end-market demand, Mr Kleinfeld said Alcoa was raising its projection for global aluminum consumption from 10 per cent to 12 per cent this year.
In its earnings release, Alcoa said net profit was $136 million, or 13 cents per share, compared with a loss of $454 million, or 47 cents per share in the same quarter last year. Earnings from continuing operations were $137 million, 13 cents per share. Revenue rose 22 per cent to $5.2 billion, the Pittsburgh-based company said.