AP reported that in a dismal prelude to the earnings season, Alcoa Inc reported a quarterly loss of USD 1.19 billion after Alcao announced cuts due to sinking prices and demand for the metal. Alcoa said fourth quarter revenue sank 19% to USD 5.7 billion from USD 7 billion in the year earlier period.

Alcao's loss highlighted the severe impact of the economic downturn on key aluminum markets, such as the auto and construction industries. Prices of the metal, used in everything from cars and aircraft to window frames and beer cans, have fallen steeply along with other commodities since mid 2008. Analysts don't expect a rebound before mid 2009.


Mr Klaus Kleinfeld president & CEO of Alcoa said that "The aluminum industry is caught up in a perfect storm of historic proportions. The price has never before fallen so fast. As demand disappears, inventories are building and prices are decreasing."

Alcao said the results were driven by a 35% price decline in the quarter, a 56% decline from July 2008 and sharply lower demand, particularly from the automotive, commercial transportation and building and construction sectors.

Aluminum demand in the US, which accounts for about 18% of the global market, has been falling for months, pushed down by declines in the residential housing and automotive markets. The Census Bureau said new home sales in November 2008 were down over 35% from the same month in 2007. US auto sales dropped 36% in December 008 from a year ago.

(Sourced from: AP)