Aluminum stocks have been beaten down in recent weeks as signs of slower growth in China and Europe raised questions about the global economy and demand for their products. Over the last month, the Global X Aluminum ETF has fallen roughly 7.36%. Five Star Equities examines the outlook for companies in the Aluminum industry and provides equity research on Alcoa Inc and Alumina Limited.
China reported recently that its biggest trade deficit in at least 22 years as government data also showed the world's second largest economy had the weakest January to February factory production gain since 2009.
Mr Bikash Bhalotia a metals and mining analyst at PINC Research in Mumbai said that China is the biggest consumer of most commodities and any change in growth forecast of the country will have a bearing worldwide.
Australia's Bureau of Resources and Energy Economics recently forecast that alumina may average USD 339 per tonne this year 12% less than in 2011 as world aluminum production slows.
Not all of the aluminum industry remains downbeat however. Alcoa, the largest US aluminum producer forecast 7% growth in global aluminum demand this year and said cutbacks in production will result in a global supply deficit of 600,000 tonnes in 2012. Alcoa added that its growth projection was ahead of the 6.5% rate required to meet the company's forecast of a doubling in global aluminum demand between 2010 and 2020.
Alumina Limited, through its 40% equity interest in Alcoa World Alumina and Chemicals, engages in the bauxite mining, alumina refining and aluminum smelting businesses.
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