China will be the main driver in the metal’s ‘slight slowdown’, according to Klaus Kleinfeld, chairman and CEO of Alcoa. He alluded to Chinese demand picking up at the end of the fourth quarter.
Alcoa’s new growth forecast follows hot on the heels of both the IMF’s and Rio Tinto’s reduced growth forecasts which, claims Lloyd O’Carroll of analyst Davenport & Co is a clear sign that the global economy is slowing down.
Alcoa shares experienced their biggest drop in 11 months, falling 4.6% to $8.71 in New York.
The company expects demand from heavy-truck and trailer manufacturing to fall this year, with the Chinese market dropping by as much as 21%. It is likely that Chinese can and packaging growth will fall too, but only by 8% and not 20% as originally forecasted by Alcoa.
Alcoa’s reported third-quarter net loss of $143 million is being blamed on the Chinese slowdown, although the company claims improved productivity across all of its business activities.
