written by reader Bull market in Aluminum Coming ?

By hendrixnuzzles, April 17, 2015

Hi Eveyone,

I saw a chart on aluminum price and supply, and it looks like reduced
stockpiles have not yet affected aluminum prices. Does anyone have a
POV on this, and what might be good plays on aluminum, assuming one believes prices are going to go up soon ?

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SoGiAm
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April 18, 2015 7:26 am
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Travis Johnson, Stock Gumshoe
April 20, 2015 5:56 pm
Reply to  SoGiAm

I’ve almost never written about aluminum, but demand has certainly been rising — I think they built up quite an oversupply for a while though, like with most commodities, when prices were a bit higher. Value-added for automotive and aerospace seems to be the key to the aluminum sector, so the quick “who benefits” answer is probably Alcoa and Precision Castparts.

Aluminum production is an incredible consumer of energy, which is why they try to hard to put plants near hydro electricity, or near the geothermal vents in Iceland, so you’d think that higher demand and lower energy prices would be good for the sector, but you have to have a pretty good handle on the industrial demand — you can check the chart of Aluminum going back 25 years at this site, I don’t get much sense of what causes the moves from one extreme to the next: http://www.infomine.com/investment/metal-prices/aluminum/all/

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