Alcoa (AA)

Re: Alcoa (AA)

Postby winston » Thu Jul 19, 2018 10:17 pm

Alcoa cuts its full-year forecast, citing tariffs; shares slide

Alcoa lowered its forecast for 2018, citing U.S. tariffs on imported aluminum and rising energy costs.

Alcoa now expects adjusted EBITDA to range between $3.0 billion and $3.2 billion, compared to its previous forecast of $3.5 billion to $3.7 billion.

Alcoa said the tariffs led to an extra $15 million in costs in the reported quarter that were mainly levied on aluminum imported from Canada, its biggest supplier.

Source: CNBC

https://www.cnbc.com/2018/07/19/alcoa-c ... slide.html
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Re: Alcoa (AA)

Postby winston » Sun Nov 26, 2023 7:35 pm

not vested

Cheap Stock No. 2: Alcoa

by Eric Fry

Because of widespread anxiety about the near-term risk of recession, many “battery metal” stocks have plummeted 50% or more.

Therefore, at their current depressed valuations, some of these stocks are pricing in so much doom that they fail to reflect any of the long-term boom for battery metals.

One of those stocks is Alcoa Corp. (AA), the largest U.S.-based aluminum producer.

Aluminum does not receive the same high-profile attention that other battery metals do, but the solar industry is a prodigious consumer of aluminum, and so is the EV industry.

Certainly, Alcoa’s stock might fall further. But the current valuation is cheap enough that the stock could deliver outsized gains over the next several months, especially if aluminum demand ramps up more quickly and powerfully than recession-phobic investors currently expect.

Plus, the stock might also catch a boost if the White House enacts a ban on Russian aluminum. That story surfaced in early February 2023.

Trends in the aluminum market are similar to trends in the copper market, which is good news for Alcoa, based in Pittsburgh.

But first the bad news…

After spiking to $4,000 a tonne during the early days of the Ukrainian invasion, the aluminum price tumbled about 40%, which caused Alcoa’s share price to drop as much as 65%.

Incessant chatter about recession and demand destruction is weighing on the price of aluminum. But as with copper, the long-term outlook for the silvery metal is excellent.

A new report from the London-based International Aluminium Institute finds that global aluminum demand will jump about 40% by 2030 – and cleantech industries will power most of that growth.

As a result, the report states that aluminum producers will need to ramp up their production from 86 million metric tons in 2020 to 120 metric tons by 2030.

According to the research firm, Wood Mackenzie, solar industry demand for aluminum could increase from just under 3% of total world consumption to nearly 13% by 2040.

In the EV industry, aluminum does not play a significant electrification role, but the body and chassis of each Tesla Model S contains about 410 pounds of aluminum!

That’s no accident. Because aluminum is so much lighter than steel, EV manufacturers covet the metal. An aluminum vehicle can travel much farther on a single charge than a steel vehicle can.

For this reason, many EV manufacturers are ramping up their aluminum consumption. In fact, aluminum is the fastest-growing material in the automotive market.

In 2021, the auto industry accounted for about 20% of global aluminum demand. Within that slice of the pie, the EV portion was only about 2%.

But that percentage is certain to grow rapidly over the coming decade. Wood Mackenzie expects aluminum demand for EVs to hit 2.4 million tonnes by 2025, and then quadruple to nearly 10 million tonnes by 2040. At that point, EV demand for aluminum would total about 12% of the global total.

Obviously, these forecasts are merely guesses, but the trend is clear. EV demand for aluminum is ramping higher. And that’s just one source of demand from the cleantech sector.

According to the IAI, renewable energy needs will create demand for aluminum to replace existing copper cabling for power distribution. In total, the electric sector will require an additional 5.2 million metric tons by 2030, according to the group.

Interestingly, despite all the talk about slack demand for aluminum, global stockpiles of the metal are near historic lows… just like they are in the copper market!

The combined aluminum inventories of the major commodity exchanges in London, Shanghai, and New York have fallen to their lowest levels in more than 20 years.

But despite the strong supply-demand dynamics in the aluminum market, the Alcoa share price is reflecting all doom and no boom. The stock changes hands for less than four times earnings.

From this low valuation, Alcoa offers substantial upside potential – both over the next few months and over the next few years.

Source: Smart Money
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Re: Alcoa (AA)

Postby winston » Fri Mar 01, 2024 8:56 am

not vested

Alcoa is the largest U.S.-based aluminum producer.

Now, aluminum does not receive the same high-profile attention that other battery metals do, but the solar industry is a prodigious consumer of aluminum, and so is the EV industry.

Despite the strong supply-demand dynamics in the aluminum market, the Alcoa share price is reflecting all doom and no boom.

The stock changes hands for less than four times earnings.

From this low valuation, Alcoa offers substantial upside potential – both over the next few months and over the next few years.

Source: Investor Place
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