Norsk Hydro ADR

Integrated producers such as Alcoa stand to gain from rising alumina prices. Alcoa also sells bauxite and alumina along with primary aluminum.

Alcoa has revised down its 2016 global aluminum demand growth projection to 5%.

As an Alcoa (AA) shareholder, you might like to know whether the split will create value. The value, in this case, would basically mean whether the two separate companies would be worth more than the combined entity.

If implemented, President Trump’s policies could help US-based aluminum producers like Alcoa (AA) and Century Aluminum (CENX).

Previously in this series, we’ve seen how commodity prices could impact Alcoa’s 2Q17 revenues. Along with revenues, investors should also keep track of profitability metrics.

Century Aluminum generated free cash flows of -$11 million in 3Q16. Prior to 3Q16, it generated positive free cash flows for two consecutive quarters.

A stronger US dollar could be positive for Alcoa’s earnings. However, investors still need to watch how the stronger US dollar impacts aluminum prices.

Based on consensus estimates, Alcoa carries a mean one-year target price of $47.25—4.1% upside compared to its closing price on September 22.

Alcoa carries a mean one-year target price of $50.92—7.7% potential upside compared to its closing price on October 13.

According to Century Aluminum, global aluminum markets were in a deficit of 0.5 million metric tons in 1H16—mainly due to lower Chinese production.

US Midwest aluminum premiums are currently quoted at $0.07 per pound. Premiums have fallen slightly in July and are now down more than 22% year-to-date.

The decline in alumina prices is a concern for Alcoa. The profitability of its alumina operations would be hit due to lower alumina prices.

Alcoa (AA) has integrated operations. Under the current market scenario, integrated operations could become Alcoa’s competitive advantage.

According to data compiled by Bloomberg, Century Aluminum is expected to post revenues of $445.7 million in its 3Q15 earnings release. In 2Q15, it had net revenues of $523.5 million.

Earlier, Alcoa projected a 1.1 million metric ton deficit for global aluminum markets. It revised down its deficit projection during its 2Q16 conference call.

For aluminum producers, the all-in aluminum price consists of the price of aluminum plus physical aluminum premiums. These premiums are regional in nature.

For commodity companies like Rio Tinto (RIO), the industry outlook is as important, if not more important, than the company’s position in the industry.

Aluminum industry outlook For commodity companies like Rio Tinto (RIO), industry outlook is as important—if not more important—than the company’s position in the industry. Let’s see what senior aluminum executives have had to say about the aluminum industry’s outlook during their companies’ 3Q16 earnings calls. Century Aluminum Century Aluminum (CENX) expects two million metric tons […]

Alcoa could command a scarcity premium. Would investors pay a premium to play the aluminum space that’s saddled with massive Chinese overcapacity?

China’s unwrought aluminum exports rose 20.4% YoY in August. Although the increase is a concern, things aren’t as bad as suggested by the big YoY spike.

In 2014, Alcoa (AA) sold its stake in the Mt. Holly smelter to Century Aluminum (CENX).

The question of restarting US plants cropped up during Alcoa’s 4Q16 earnings call. However, Alcoa’s management sounded wary.

According to data compiled by Thomson Reuters, analysts expect Century Aluminum (CENX) to post revenue of $346 million in 4Q16 and $371 million in 1Q17.

Elliott Management noted that it plans to engage in a “constructive dialogue” with Alcoa’s (AA) board regarding Alcoa’s split transaction and “additional available opportunities to maximize shareholder value.”

Alcoa’s (AA) 2018 earnings have been supported by higher alumina prices.

Alcoa (AA) is an integrated aluminum producer like Rio Tinto (RIO) and Norsk Hydro (NHYDY) and produces alumina and aluminum (DBB).

Alcoa’s (AA) valuation has fallen over the last year. Currently, it trades at a discount to its five-year average. The valuation fell for a reason.

Although lower alumina prices might not immediately lead to a decline in aluminum prices, they certainly could limit aluminum’s upside.

Most aluminum producers’ earnings were received well by markets. Alcoa (AA) saw an upward price action of 5.4% after its earnings release.

In this article, we’ll analyze how analysts are rating Century Aluminum leading up to its 4Q16 earnings.

Donald Trump appears to favor a more aggressive trade policy—regularly citing job losses as a result of imports from countries, especially China (FXI).

Century Aluminum (CENX) stock has received a “hold” rating from three of the four analysts polled by Thomson Reuters.

Post-split, the new Alcoa wouldn’t have the privilege of reporting value-add earnings in its consolidated financials.

Alcoa (AA) is gearing up for its split, which is scheduled in the second half of 2016. After the split, the value-added company—which will be named Arconic—will produce precision components and other value-added products.

Norsk Hydro (NHYDY) has announced a production halt at its Alunorte alumina refinery in Brazil.

In 2018, analysts expected disruptions in the copper supply. However, the copper supply has been resilient in 2018.

Century Aluminum (CENX) was among the best-performing aluminum stocks in 2016, with gains of 94%.

Rio Tinto’s (RIO) Aluminum division contributed 19% of its 1H16 underlying EBITDA (or earnings before interest, tax, depreciation, and amortization).

According to consensus estimates compiled by Thomson Reuters, Alcoa (AA) has a mean one-year price target of $42.44, representing a 25.8% upside over its closing price on April 28, 2017.

Previously in this series, we looked at recent trends in aluminum prices. In this article, we’ll see how markets are valuing US aluminum producers after last week’s sell-off.

According to data released by the International Aluminum Institute, China produced 2.5 million metric tons of aluminum in December—a YoY increase of ~1%.

Alcoa (AA) expects to generate adjusted EBITDA between $2.1 billion and $2.3 billion in fiscal 2017. Alcoa assumed aluminum prices at $1,900 per metric ton.

Elliott Management plans to engage in a “constructive dialogue” with Alcoa’s board about Alcoa’s split transaction and “additional available opportunities to maximize shareholder value.”

Weak sentiment in physical aluminum markets could be a reason behind the divergence between Alcoa (AA) and aluminum prices.

US physical aluminum premiums have been steady after rising sharply earlier in the year.

While aluminum demand is still rising, there are varying estimates about aluminum consumption.

Alcoa is working to reduce the unit production costs for its plants. If this is not possible, the company could idle these plants.

In 1Q17, there were rumors that Rio Tinto (RIO) could acquire Alcoa.

Currently, Alcoa is trading at 8.6x its forward EBITDA. This valuation multiple looks somewhat aggressive for a pure-play commodity producer.

One of the major challenges for the global aluminum industry has been the rise in China’s aluminum exports.

The unwinding of aluminum financing deals could have a negative impact on aluminum prices. Earnings of aluminum producers such as Alcoa (AA) are sensitive to aluminum prices.

In 2Q17, Arconic generated adjusted EBITDA (earnings before interest, tax, depreciation, and amortization) of $444 million, up 3% as compared to the corresponding period last year.

Alcoa (AA) released its 1Q17 earnings on April 24 after the markets (MDY) (MID-INDEX) closed. It held the conference call the same day.

During their 2Q16 earnings calls, Century Aluminum (CENX) and Norsk Hydro (NHYDY) expressed concern over higher Chinese supply in the second half of the year.

Alcoa’s technical indicators To make market entry and exit decisions, traders and investors analyze technical indicators. Resistance and support levels are among the most commonly used technical indicators. Resistance level Support levels typically act as a floor for stock prices. As a stock approaches its support levels, more buyers emerge while selling pressure generally subsides. […]

According to estimates compiled by Thomson Reuters, Alcoa is expected to post an adjusted EBITDA of $2.08 billion in 2017 and $2.0 billion in 2018.

After the split, the new Alcoa (AA) will house the business units that are currently under the Primary Metals and Alumina segments. We’ll look at the challenges that Alcoa could face once it is listed as a separate company.

When forward prices are lower than spot markets, it’s described as “backwardation.” When future prices are higher than the current spot prices, it’s referred to as “contango.”

While aluminum prices are global and are decided by trading mechanisms, physical premiums are negotiated between the end buyers and sellers.

Aluminum has been among the better-performing base metals this year. With gains of 13.0% in the first half of 2017, aluminum has outperformed copper and zinc.

Alcoa (AA) is expected to release its 2Q17 earnings on July 19 after markets close. Here’s what you need to know.

Aluminum producers’ 3Q16 cash flows Previously, we looked at aluminum producers’ 3Q16 earnings. However, looking given the current challenging situation, the market (DIA) appears to be more interested in cash flows. Generating negative free cash flow can lead to cash burn. When this happens, companies have to borrow to fund their deficits, and so negative free […]

In this article, we’ll look at key updates the markets might be watching for in Alcoa’s second-quarter earnings call.

Analysts seem to be factoring lower-than-current aluminum prices next year when it comes to aluminum producers’ 2018 revenue estimates.

Aluminum producers like Alcoa (AA), Century Aluminum (CENX), and Norsk Hydro (NHYDY) see Chinese aluminum overcapacity as a major challenge.

Alcoa (AA) posted record EBITDA (earnings before interest, tax, depreciation, and amortization) in the second quarter.

In this series, we’ll see how the US aluminum markets have changed since the Trump administration’s implementation of its Section 232 tariffs.

Alcoa (AA) and Century Aluminum (CENX) are trading with double-digit year-to-date losses despite the Section 232 tariffs President Trump imposed.

As we noted previously in this series, aluminum prices have seen downward pressure this year. Lower aluminum prices are negative for aluminum producers like Rio Tinto (RIO) and Norsk Hydro (NHYDY).

Last week, President Trump temporarily exempted some countries from the Section 232 tariffs. According to the Commerce Department, the United States imported ~6 million metric tons of aluminum in 2016.

As we noted previously in this serieds, both Alcoa (AA) and Century Aluminum (CENX) have now turned negative for the year.

We saw a sharp sell-off in the equity markets last week. The key driver has been the risk of a trade war.

The Section 232 findings were released on February 16. Between February 19 and March 16, LME aluminum has fallen ~$200 per metric ton.

President Trump has imposed a tariff of 10% on aluminum imports—based on the Department of Commerce’s Section 232 investigation.

In this article, we’ll take a look at how analysts are rating different aluminum producers.

China exported 370,000 metric tons of unwrought aluminum in September, compared to 410,000 metric tons in August.

According to consensus estimates compiled by Thomson Reuters, Alcoa is expected to post revenues of $2.97 billion in 3Q17.

Since China is the largest aluminum consumer, it’s important for investors to keep track of the country’s aluminum demand (ACH) (FXI).

Although we don’t have historical valuation multiples for Alcoa because the stock was split late last year, its valuation multiples look reasonable.

In the first eight months of 2017, Chinese aluminum exports were 3.26 million metric tons—5.8% higher than the same period the previous year.

Aluminum prices have been strong in 2017 and have built on last year’s gains. The entire industrial metals space has come a long way since 1Q16.

As we noted previously, aluminum prices have been strong this year. Strength has been driven by positive supply and demand dynamics.

Century Aluminum (CENX) released its 2Q17 financial results on August 2 after the markets closed. The company reported revenues of $2.86 billion in 2Q17.

Previously in this series, we’ve looked at China’s July steel exports. In this article, we’ll look at the country’s aluminum exports.

Previously in this series, we’ve looked at Alcoa’s (AA) 2Q17 earnings estimates. In this article, we’ll see how leading brokerages are rating Alcoa stock ahead of its 2Q17 earnings release.

As we noted previously, Alcoa is now a pure-play aluminum producer. The company is an integrated aluminum producer with bauxite mining, alumina refining, and aluminum smelting operations.

Developments in the Chinese aluminum industry tend to impact the global aluminum industry. Chinese aluminum exports interest companies like Alcoa (AA).

Alcoa (AA) is trading well below its 2017 highs. Commodity market sentiments have been dented over the last few months.

Previously, we’ve seen how analysts are rating different copper producers. In this article, we’ll see which aluminum stock analysts are bullish on.

China’s aluminum demand is expected to be strong this year. Alcoa raised its 2017 global aluminum demand forecast to 4.5%–5.0% from its previous guidance.

Aluminum prices are the key driver of aluminum producers’ earnings.

During its 1Q17 earnings call, Alcoa (AA) raised its 2017 global aluminum demand forecast to 4.5%–5.0% from its previous guidance of 4.0%.

Alcoa and Century Aluminum (CENX) survives the commodity price slump by closing their high-cost capacities and negotiating better power deals for several operating plants.

Century Aluminum (CENX) was among the best-performing aluminum stocks (NHYDY) (ACH) (SOUHY) last year with gains of 94%.

Three out of four analysts polled by Thomson Reuters rated Century Aluminum as a “hold,” while one analyst rated the stock as a “sell.”

Of the 13 analysts surveyed by Thomson Reuters, ten analysts rated Alcoa stock as a “buy,” three rated it as a “hold,” and no analysts rated it as a “sell.”

Aluminum prices have shown strength in 2017 and have built on 2016 gains. So far, aluminum has risen 14.7% in 2017—compared to a 13.4% rise in 2016.

For commodity companies such as Rio Tinto (RIO) and Century Aluminum (CENX), the industry outlook is as important, if not more important, than their positions in the industry.

Aluminum premiums are key indicators that investors in primary producers such as Century Aluminum (CENX), Norsk Hydro (NHYDY), and Rio Tinto (RIO) should track.

Due to Alcoa’s (AA) strong cash flow generation in November and December 2016, its net debt fell below $600 million on December 31, 2016.