Aluminum prices have been up most of the month fuelled by a weak US dollar and the recent declaration by the Federal Reserve of its intention to buy USD 600 billion of Treasuries. Emerging markets have been a huge source of revenue as economies in China, Brazil and Russia markets have become richer leading to higher levels of building. One of the fundamental reasons for the turnaround in the aluminum industry has been the continued production discipline demonstrated by China.
From 2002 to 2008, China had been a net exporter of aluminum, but has since become a net importer. The Bedford Report examines the outlook for companies in the Aluminum industry and provides research reports on Aluminum Corporation of China and Kaiser Aluminum Corporation.
The Chinese Government recently announced that restrictions on power that will come into place in an attempt to rein in energy consumption might also affect the market well. Aluminum plants use a massive amount of energy and once the power cuts come into effect, the plants are expected to be limited in their ability to produce. Recent reports from Reuters indicate that China will likely curtail another 600,000 tonnes of aluminum smelter production before the end of 2010.
Based on the Chinese Government's measures to control property market growth, and once again become a net importer of aluminum, Aluminum Corp of China has seen a drop in domestic demand. According to a recent article in Reuters, Aluminum Corporation of China, the largest member of the Aluminum industry based on Market Cap is attempting to diversify its operations by buying into coal rare earth, copper and iron ore assets.
Recently Kaiser Aluminum reported that Q3 net income dropped 74% to USD 6 million or 29 cents per share from USD 23 million or USD 1.14 per share, a year earlier. Net sales rose slightly to USD 263 million from USD 252 million. Mr Jack Hockema CEO Kaiser warned that we do not anticipate any meaningful restocking of service center inventories until the economic recovery is strong enough.
The Bedford Report provides Analyst Research focused on equities that offer growth opportunities, value and strong potential return. We strive to provide the most up to date market activities. We constantly create research reports and newsletters for our members. The Bedford Report has not been compensated by any of the above mentioned publicly traded companies. The Bedford Report is compensated by other third party organizations for advertising services. We act as an independent research portal and are aware that all investment entails inherent risks.
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