Chris Ayers, Alcoa EVP and President, Global Primary Proucts told the CRU 17th World Aluminium Conference in Abu Dhabi that the global primary demand growth rate will be 7% in 2012.

This compares to a 10% growth rate in 2011. Driving growth will be the aerospace market where a 13% rise will occur. Aircraft manufacturers Boeing and Airbus have backlogs of seven to eight years and require aluminium for their aircraft.

The automotive industry could see up to 7% global aluminium growth as it continues to lightweight vehicles for better emissions and fuel savings.

The North American heavy truck market will see up to a 12% growth this year but the beverage can market may fall 3% in the region. This will be offset by beverage can growth in China of up to 12%.

However the legacy of the 2008-09 recession continues with the surplus aluminium generated during the crisis still remaining and high cost capacity continuing to operate.

Mr Ayers said Alcoa aims to move 10 points down the cost curve from 51st to the 41st percentile. Steps taken include making facilities more efficient, closures and idling of some high cost plants and modernising those smelters where power is cheaper.

This includes the Baie Comeau smelter in Quebec, Canada where it is replacing its Soderburg technology with pre-baked technology, which will repower it until 2040. Similarly, it has agreed a 30 year power deal at its Massena East smelter in the USA.

Its alumina division has also been targeted for efficiency gains. Its Wagerup and Pinjarra refineries, Western Australia, creeped production up 400t/day in 2011 over 2010 thanks to efficiency gains.