HOUSTON (ICIS)--Alcoa on Tuesday reported strong sales and revenue growth and reaffirmed a 7% growth forecast for aluminium for 2014.
That is good news for what has been a moribund market with a large inventory overhang during the past two years. Alcoa and other producers have shuttered smelters and other facilities in the past 18 months to help normalise supply.
Alcoa on Tuesday said it had sales of $5.84bn during the second quarter and profits of $138m compared to losses of more than $119m during the year-ago period and losses of $178m during the first quarter of 2014.
Additionally, the company lowered its debt level to one equivalent to that of 2008, the company said in a prepared statement.
The improvements are good news for producers of caustic soda, a key ingredient for making alumina, which accounts for about 8% of caustic soda demand. The caustic soda market has also been burdened with long supply.
Klaus Kleinfeld, Alcoa chairman and CEO, said the earnings report encompasses two themes, strong performance and the company’s continued transformation.
Revenues were up by $380m on higher aluminum prices and higher volumes, the company said. The improved cash flow was attributed to continuing strong auto sales and strength in the aerospace industry which helped propel the company’s returns.
The company also saw improvement in oversupply of alumina, saying that China is now importingThe company said it expected to see continued economic recovery in North America for the predictable future.