Alcoa CEO: No plans to boost aluminum production

PITTSBURGH (AP) -- Demand for aluminum has fallen so sharply amid the weak global economy that distributors are selling even their reserves of the lightweight metal without buying more, Alcoa Inc.'s top executive said Friday. Pittsburgh-based Alcoa, the largest U.S. aluminum producer, has cut its output by 20 percent since last fall, when the deteriorating global economy eroded demand for the metal. Stockpiles grew and prices tumbled about 60 percent in the second half of the year. Now distributors' stockpiles have dropped to the lowest levels Alcoa has ever seen, Klaus Kleinfeld, the company's president and chief executive, said in an Internet broadcast from an investors' conference in New York. Most distributors have "thrown out the window" their normal requirements for supplies of aluminum, opting to "get rid of the inventory that generates cash" because the sagging economy has wiped out demand, Kleinfeld said. Alcoa has no immediate plans to restart production at idled plants because it has sufficient supplies for the near term, he said, and the global industry may further curb aluminum-making if the market doesn't improve this summer. Lower aluminum supplies and government economic stimulus programs -- like one in China that is working "magnificently well" -- are catalysts for growth, he said. China is the world's largest aluminum producer and consumer. Distributors have been asking Alcoa how quickly they might get aluminum if they need it because they see so-called "green shoots," or hints of a revival, in some industries, Kleinfeld said. "Even though there are some green shoots ... I don't think we really need any (production) restarts at this point in time," he said. "I'm not too concerned about it." When renewed aluminum consumption becomes apparent, "the distribution chain will generate this sucking sound of demand that will come through the system." Alcoa has forecast a 7 percent drop in global aluminum demand this year, compared with a 3 percent decline in 2008. China will be the only market where demand grows, while Europe and North America will see declines of 15 percent. Shares of Alcoa rose 4 cents to $9.13 in afternoon trading.