MARKET TALK: Aluminum Dynamic Won't Change On An Alcoa Merger

A BHP Billiton (BHP) or Rio Tinto (RIO.AU) merger with Alcoa (AA) won't lead to change in aluminum or alumina production dynamic, says Daiwa analyst Mark Pervan. Says "most aluminum and alumina growth will come from China whereas outside production is declining", noting marginal smelters in North America, Europe; "the ramp-up in China will look disturbing to producers outside and will keep pressure on prices." Disruptions such as general strike in Guinea to offer some reprieve to alumina market in short term only. LME 3-month aluminum unchanged on yesterday's PM kerb at $2,707/ton. BHP last +0.4% at A$28.71, RIO +0.2% at A$76, with Times of London reporting duo have drawn up separate plans for $40 billion takeover of Alcoa.