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Alcoa Shines on Solid Aluminum Demand
Edited by : AL CIRCLE
1 min read
Alcoa’s (NYSE:AA) total alumina shipments rose from 14.6 million tons in 2006 to 16.5 million tons in 2010 with a blip in 2009 due to unfavorable economic conditions that led to a decline in the overall industrial output and demand for aluminum. Alcoa, which competes with mining giants like Rusal, Rio Tinto (NYSE:RIO), BHP Billiton (NYSE:BHP) and Chalco (NYSE:ACH), is upbeat about the global outlook for aluminum and expects the strong demand to continue in the next decade. Last quarter, Alcoa reported almost $6 billion in sales, up 20% year-over-year. (See Alcoa on Track for a Bumper Year)
Given the unique characteristics of aluminum and its growing demand, we expect Alcoa’s alumina shipments will rise to 21 million tons by the end of our forecast period. Trefis members, however, predict a more optimistic scenario with the shipments reaching 25.4 million tons – implying an upside of close to 5% to our Alcoa stock price estimate.
Given the unique characteristics of aluminum and its growing demand, we expect Alcoa’s alumina shipments will rise to 21 million tons by the end of our forecast period. Trefis members, however, predict a more optimistic scenario with the shipments reaching 25.4 million tons – implying an upside of close to 5% to our Alcoa stock price estimate.
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