A reduction in Chinese production should be a win for aluminium producers in other countries, major US producer Alcoa has said in its first-quarter update.
Alcoa this week announced a US$225 million net profit in the first quarter of the calendar year, up from a US$125 million loss in the last quarter of 2016.
After special items, the first quarter net profit was US$117 million, after an adjusted net profit of US$26 million in the last quarter.
The growth is off the back of extensive growth in adjusted earnings before interest, tax, depreciation and amortisation (EBITDA).
Adjusted EBITDA in the first quarter of 2017 was US$533 million, up from US$335 million in the previous quarter.
Chief executive Roy Harvey said the first quarter was a “strong start”.
“In our bauxite segment, our third-party business remained strong and we continued to grow profits, while our alumina and aluminum segments captured the benefits of improved market pricing to increase earnings substantially,” he said.
Alcoa is projecting global aluminium demand growth of between 4.5% and 5%.
China recently announced it would cut down on alumina and aluminium production for environmental reasons.
Harvey said Alcoa was at the forefront of progress when it came to the environmental side of aluminium production.
“There’s a lot of work going on the environmental side on alumina, so I think we’re cautiously optimistic,” he said.