Alcan profit rises 30% on improved aluminium prices

Alcan profit rises 30% on improved aluminium prices

Alcan Inc, the world`s second-largest aluminum company, said first-quarter profit rose 30% to a record as improved aerospace and construction demand boosted prices. The shares jumped the most in two months.

Net income rose to US$591 million, or US$1.60/share, from US$453 million, or US$1.21, a year earlier, Montreal-based Alcan said in a statement.

Alcan received about 16% more for each ton of aluminum compared with a year earlier, fueling record profit at its primary-metals business.

Higher prices are prompting Alcan to expand in Canada and South Africa where the company is taking advantage of cheaper power sources to increase output.

Alcan, led by chief executive officer Richard Evans, plans to spend US$1.8 billion in Quebec to add as much as 450,000 t of smelting capacity after the Canadian province offered tax and power incentives. The company also is building a US$2.7 billion smelter in Coega, South Africa, that will be able to produce about 720,000 t of aluminum.

Alcan expects a "modest" global aluminum surplus of 200,000 t this year, compared with a 162,000 t deficit in 2006, equivalent to 0.5% of estimated total world supply.