Alcoa and Century Aluminum to Benefit From Stabilized Prices and Skyrocketing Demand

Aluminum prices have fallen approximately 10 percent this year amid concerns that the global economic slowdown may cut demand for raw materials. While that number may be alarming, ten percent is the smallest drop among the six industrial metals traded on the London Metal Exchange. Aluminum demand remains fairly strong as more of the metal is used in electronics, cans and transportation and construction. The Bedford Report examines the outlook for companies in the Aluminum industry and provides equity research on Alcoa, Inc. (NYSE: AA) and Century Aluminum Co. (NASDAQ: CENX).

According to researcher CRU, Aluminum will have the biggest annual demand increase among industrial metals through 2015 as its surplus turns to a shortage. The researcher argues that consumption will outpace supply in 2015 as demand grows an average 7.6 percent a year.

Aluminum has been taking on a bigger role in electronics products as designers have started to use more environmentally friendly materials. Industry experts explain that the metal is easily recycled with no loss in quality. Moreover, the push by automotive and aerospace companies to create lighter and consequently more fuel efficient vehicles has also helped to bolster demand for lightweight aluminum. Alcoa spokesman Kevin Lowery said Aluminum's density is one-third that of steel.