15 AUGUST 2014Yahoo Finance
Nomura says aluminum rally is overdone
Edited by : AL CIRCLE
1 min read
Alcoa shares trended down Thursday after one analyst said the worldwide aluminum market has slipped into an oversupply that will persist into 2015.
Alcoa shares are up more than 50 percent year to date, hit a high of $17.22 last month, but has been in retreat in recent days.
Nomura's Curt Woodworth said oversupply of the metal is causing weakness in spot prices which is also seen persisting into next year.
"Aluminum's recent rally has been overdone," Woodworth said in a note, adding that he expects the metal will retreat to $0.82 per pound. The price recently crossed $0.91 per pound or $2,000 per metric ton.
Investors have been buying up aluminum and storing it in warehouses that aren't registered with the London Metals Exchange and Woodworth sees a risk to prices if these stocks enter the market. Woodworth may be a contrarian, however.
JP Morgan sees a shortage of aluminum this year totaling 439,000 metric tons and expects prices to increase next year by 12 percent.
Shares of Alcoa traded recently at $16.10, down 2.06 percent.
Alcoa shares are up more than 50 percent year to date, hit a high of $17.22 last month, but has been in retreat in recent days.
Nomura's Curt Woodworth said oversupply of the metal is causing weakness in spot prices which is also seen persisting into next year.
"Aluminum's recent rally has been overdone," Woodworth said in a note, adding that he expects the metal will retreat to $0.82 per pound. The price recently crossed $0.91 per pound or $2,000 per metric ton.
Investors have been buying up aluminum and storing it in warehouses that aren't registered with the London Metals Exchange and Woodworth sees a risk to prices if these stocks enter the market. Woodworth may be a contrarian, however.
JP Morgan sees a shortage of aluminum this year totaling 439,000 metric tons and expects prices to increase next year by 12 percent.
Shares of Alcoa traded recently at $16.10, down 2.06 percent.
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