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Consumption of aluminum is on pace to outpace production of the lightweight metal this year as some money-losing Chinese smelters limit their output, Alcoa Inc.'s (AA) chief executive said on Tuesday.
"We see [demand] growth in pretty much all global end markets," Klaus Kleinfeld said on a conference call to discuss the top U.S. aluminum maker's first-quarter earnings.
Alcoa expects global demand for the metal to outpace production by 435,000 metric tons, down slightly from its January forecast for a deficit of 600,000 tons on expectations of fewer production cutbacks outside of China.
Prices of the metal, which is used in packaging, beverage cans, cars, trucks and airplanes, among other uses, have been capped in recent months by ample supply. In China, by far the world's top producer, production hit a record in February, according to International Aluminum Institute data, even as Alcoa and other companies based in Europe and the U.S. announced output cutbacks.
Alcoa this year announced plans to close or idle 12% of its aluminum-smelting capacity in an effort to lower its costs.
Alcoa's outlook for a global production deficit hinge on expectation that Chinese smelters will take about 1.1 million tons of production offline in response to high energy costs, Kleinfeld said.
Alcoa said on Tuesday that its first-quarter profit fell 69% from a year earlier as aluminum prices fell and energy costs rose. The company reported a profit of $94 million, or nine cents a share, down from a year-earlier profit of $308 million, or 27 cents a share.
-By Matt Day, Dow Jones Newswires; 212-416-4986; firstname.lastname@example.org