Crucial $10 level
For almost two months, Alcoa (AA) closed below the psychologically crucial level of $10. Alcoa’s stock rose almost 14% since November 12 when it hit its 52-week low of $7.81. It failed to breach the resistance level of $10.
Interestingly, while steel and copper companies hit fresh 52-week lows over the last week, aluminum companies managed to hold their 52-week lows. Century Aluminum (CENX) and Norsk Hydro (NHYDY) are trading comfortably above their 52-week lows. Constellium (CSTM) was the most battered stock in this space. It also saw decent upward movement in the last month. You can see this in the above graph.
Investors looking for direct exposure to base metals can consider the PowerShares DB Base Metals ETF (DBB).
In this series, we’ll look at some of the recent developments in the aluminum industry. We’ll also look at the recent trend in aluminum prices as well as the regional premiums. We’ll explore how the Chinese aluminum exports played out in November.
In its meeting held on December 4, OPEC (Organization of the Petroleum Exporting Countries) decided to raise its production ceiling. On the same day, the US job reports showed that the US economy created more jobs in November compared to what analysts were expecting. The solid jobs report and the recent hawkish stance by Fed chair Janet Yellen raised the rate hike expectations. The Fed meets later in December.
Read Does the Fed’s December Meeting Have Any Significance for Alcoa? to find out how a rate hike might impact Alcoa.
In the next part of this series, we’ll discuss the recent trend in aluminum prices.