Rio targets N.America, Asia-Pacific after aluminium smelter revamp
SYDNEY, July 8 (Reuters) - Rio Tinto said on Wednesday it was looking to lift its market share in North America and the Asia-Pacific region after revamping its Kitimat aluminium smelter in western Canada to produce nearly 50 percent more metal.
The increase in primary aluminium production at the smelter to 420,000 tonnes per year could bite into markets also supplied by rival Alcoa and other producers struggling with softer revenue caused by weak prices and rising exports from China.
Aluminium generated just $1.248 billion of Rio Tinto's $9.305 billion in underlying earnings last year. Iron ore is the company's main profit driver.
Weak aluminum prices have taken more of a toll on pure aluminium companies such as Alcoa, which releases second-quarter results later on Wednesday.
Top producer Rusal of Russia said in April it might idle 200,000 tonnes of capacity, while Alcoa said the month before it was reviewing 500,000 tonnes of smelting capacity.
Last week Alcoa said it would permanently close its Pocos de Caldas smelter in Brazil.
More than half of the analysts tracked by Thomson Reuters StarMine have cut second-quarter revenue and profit expectations for Alcoa in the past two weeks. Its stock has fallen more than 30 percent this year.
Bank of America Merrill Lynch has cut its 2015 average aluminium price forecast by 3.3 percent to $1,742 per tonne for 2015 and by 3.4 percent to $1,788 in 2016.
Rio Tinto said it was preparing to make its first shipments from Kitimat since conducting extensive modernisation work on the 60-year-old smelter. Continued...