How 2017 Looks Different from 2016 for Alcoa

With respect to trading, 2016 started on a somber note. Most commodity (DBC) stocks fell steeply on the first trading day of the year as China’s manufacturing PMI (purchasing managers’ index) came in lower than expected.

However, 2017 has started on a positive note on better-than-expected manufacturing data from China. Later in this series, we’ll analyze the different factors that could drive Alcoa’s (AA) 2017 performance. Before that, let’s see how the stock fared last year.

Alcoa made a 52-week low on January 20, 2016, and joined the ranks of other mining companies to hit fresh 52-week lows such as BHP Billiton (BHP), Rio Tinto (RIO), and Vale (VALE). However, things started to change for Alcoa in February, and the stock continued to rise steadily until April.

Weakness returned to Alcoa in May 2016, when its stock fell steeply. Most commodities saw negative price action in May, and aluminum also fell ~7% in the month.

June 2016 turned out to be another sour month for investors in the metals and mining space. The Brexit vote created a financial tsunami on June 24, drowning all risk assets. However, Alcoa and other miners soon recouped their post-Brexit losses.

Alcoa largely traded sideways in 3Q16 as markets awaited its stock split (ARNC). After the split, Alcoa saw some upward price action. Donald Trump’s election further aided Alcoa’s upward momentum. Century Aluminum (CENX) also rallied steeply after Trump’s election on hopes on a revival in US aluminum demand.

2017 could turn out to be a different ballgame for Alcoa investors. In the next article, we’ll look at the different factors that could drive Alcoa’s 2017 performance.