Alcoa rose 0.9% to $9.18 at 9:35 a.m. in New York. The shares have declined 2.4% in the past 12 months, while the Dow Jones Industrial Average rose 7.9%. Alcoa is the first company in the index to report earnings.
The company said it achieved $1.3 billion in productivity and overhead savings in 2012, surpassing its $850 million target. Alcoa saw better prices and volumes at its global rolled-products division, which produces aluminum sheets for airplane wings, beverage cans and car parts. The unit’s shipments rose 10% to 448,000 tons and third-party sales gained 4.7% to $1.77 billion.
Still, worldwide aluminum supply will exceed demand by 535,000 tons this year, the New York-based company said. Global inventories of aluminum held in warehouses monitored by the LME are 5.2 million tons, little changed from the record level recorded in December.
Kleinfeld said Alcoa estimates total worldwide stockpiles are about 10 million tons. Most of that metal is tied up in financing deals, the CEO said.
The LME price is “largely influenced by large-scale investors” who mostly base their decisions on macroeconomic news,’’ he said. “There’s a strong correlation of metal price and general economic news.”
Demand in Brazil will grow by 9% and North American usage will climb by 4%, as India and Russia grow by 7% and 6%, Alcoa said.
“They continue to see consistent growth going forward,” said Kuni Chen, an analyst at CRT Capital Group in Stamford, Connecticut. “That’s a good indicator for other sectors that are reliant on those end-markets as well.”