Alcoa's second-quarter results release the latest supply and demand forecast to become the focus of the market

SMM, July 18 / PRNewswire-FirstCall-Asianet / whether President Donald Trump's tariffs will eventually help US metal producers become a controversial topic.

Alcoa may be better able than most American metal companies to measure the impact of trade initiatives on global markets because it produces more aluminum abroad than at home. Pittsburgh-based Alcoa has called for negotiations rather than tariffs to address excess smelting capacity and is expected to update its forecasts for supply and demand.

In April, the company said it expected global demand for aluminium to grow by 4.25 to 5.25 per cent in 2018 and that the shortfall in production would widen to 1 million metric tons.

The shortage outlook contrasts sharply with the view of Harbor Intelligence, a Texas-based research group, which expects a surplus of 1.1 million tonnes of aluminium.

Alcoa expects second-quarter earnings of about $1.34 a share, according to analysts' average expectations. The company earned 62 cents in the same period in 2017. Revenue is estimated to be $3.46 billion, compared with $2.86 billion in the same period last year.

Alcoa is also one of the largest manufacturers of alumina, which is the main component of aluminum. The alumina market is in turmoil because of reduced production and US sanctions against top producers.

Supply issues revolve around alumina as pollution allegations have led to a court injunction restricting the production of Hydro, the world's largest refinery, at Brazil's Alunorte alumina plant.

Even more puzzling are US sanctions against Russian companies, including Rusal, one of the world's largest suppliers of raw materials.

Roy Harvey, Alcoa's chief executive, told analysts on the company's first-quarter earnings call that he was opening up to sell more alumina rather than feed the company's own smelter. Although Alcoa is considering all options, including plant restart, it is still keeping a close eye on the economics of its existing supply chain.