Alcoa CEO seeing biggest trade shift in ‘125 years’

Alcoa is experiencing the biggest transformation in the metals industry “in 125 years,” the chief executive told CNBC, as higher demand for lighter aluminum alloys from the auto and aircraft industries means a shift away from smelting.

The aluminum manufacturer and processor no longer has to focus on fluctuations in the metals markets now demand for lighter aluminum alloys has gone “mainstream,” Alcoa CEO, Klaus Kleinfeld told CNBC.

Read More Cramer: Aluminum maker Alcoa on ‘warpath to make big money’

Mario Laporta | AFP | Getty Images

Mario Laporta | AFP | Getty Images

Kleinfeld said the group could now be profitable “no matter where the metal price is” as a result of cost-cutting measures.

Stubbornly low aluminum prices have weighed on Alcoa and other producers, and the group has been pushing to lower expenses by shutting down higher-cost smelting facilities.

Read More What the F-150 tells us about the aluminum industry

Automakers’ demand for aluminum is growing rapidly as they seek to improve fuel efficiency, developing vehicles like Ford’s aluminum-intensive next generation F-150 pickup truck,unveiled in January.

“It’s a transformation that in our 125 years is … one of the most fundamental. The auto industry knows how to work with aluminum. But now, it’s going into mainstream, it’s going into the high volume cars,” said Kleinfeld.

“We’ve just seen now earlier this year with (Ford’s) f150 going full aluminum that’s fascinating… at the aerospace industry continues to leaven aluminum. See the recent announcement of large volume planes, to aluminum planes,” he said.

Read More Drilling down, Cramer sees many Alcoa positives

The U.S. based aluminum producer decided against visiting Russia for the St. Petersburg economic forum this year, but said its facilities in Russia were operating “normally.”

“We have decided to this year not to attend the St. Petersburg economic forum. The situation is unfortunate. I hope that the diplomatic efforts that are on the way leads to a resolution soon,” he said.

“Business thrives in peaceful times.. So I think we have a very, very strong interest to continue with peaceful times, with strong economic ties between companies and countries,” he added.

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