The price of aluminum "recover" Alcoa shares back to nearly ten year high
Since 2008 since the financial crisis, not only is a main index of global commodity prices, many also once fell cliff style, which directly lead to energy resource stocks. Alcoa, for example, is a typical example of the aluminium price that continues to be weak and runs at most of the aluminium giants.
However, since 2017, with the steady rise in aluminum prices, Alcoa has re opened the Star stock luster. Recent data show that aluminum prices had risen to five year highs, driven by Alcoa shares ended in September 20th when closing the highest level since January 2008.
Aluminum prices back up the channel
Statistical data show that LME aluminum prices began a weakness from the end of June 2008 of $3114 per ton, fell to 2009 year low until the $1392 a tonne after begin to recover. However, at the end of March 2011 rebounded to $2648 per tonne after falling again. In 2016, it was back on the path of continued growth, rising to $2171 a tonne, the highest in five years.
Alcoa stock prices and LME prices are somewhat similar, just from the 2008 highs fell after the recovery later, until the second half of 2016 began to recover.
The two obvious rebound is after entering 2017. LME3 months, aluminum prices rose 27.9% this year, or higher than the same period copper, zinc, nickel respectively 16.4%, 19.3%, 10.4% cumulative increase. Alcoa rose even more astonishing this year, the cumulative increase of 69.16%, the current record high since January 2008.
Rising aluminium prices, leading to performance improvement, is undoubtedly the main reason for Alcoa's stock price rise. Alcoa's earlier second quarter 2017 results show that it still maintains a solid profitability, with its shipments and cash balances increasing. In the two quarter of 2017, the company's net income was $75 million, with net revenues of $116 million excluding special items. Profits before interest, taxes, depreciation and amortization (excluding special items) are $483 million ($). Revenue of $2 billion 900 million, an increase of 8%. As of June 30, 2017, the company had a cash balance of $954 million and a net debt of $1 billion 400 million.
Aluminum shares rebounded together
In addition to Alcoa, the global aluminum stocks recently rose more obvious. Since last month, China aluminum (02600.HK) shares are up 39.1%, Yunlvgufen (000807.SZ) shares are up 42.8%, Nanshan aluminum (600219.SH) shares rose 11.2%. Shares of 00486.HK, listed on the Hongkong stock exchange, rose nearly 60% since July.
Major investment banks are also optimistic about the outlook for the aluminium plate and Alcoa shares. Deutsche Bank, for example, released a new report saying it had raised the Alcoa rating to "buy"".
Alcoa Corp president and CEO Roy Harvey said: "Alcoa created steady profitability in the second quarter, strong cash flow, cash balance growth has exceeded $950 million. In the first half of this year, our adjusted EBITDA reached US $1 billion, and despite the high cost of inputs, we are still expected to continue to improve in the second half. In 2017, the adjusted EBITDA (excluding special items) is expected to reach around 2 billion 100 million -22 billion dollars. We are seeking to adopt a simple strategic priority programme to reduce complexity, increase returns and strengthen the balance sheet."