[Asia Economy Reporter Hyungsoo Park] Hi Investment & Securities analyzed on the 15th that Alcoa, the largest aluminum company in the United States, continues its unstoppable stock price rise despite tightening concerns.
Yoonsang Kim, a researcher at Hi Investment & Securities, explained, "Alcoa is the 7th largest in the world and the largest aluminum company in the U.S. based on final product aluminum production volume," adding, "Recently, due to the strong aluminum prices, Alcoa's stock price has been continuously hitting new highs."
He continued, "This year's earnings forecasts are also being revised upward," and predicted, "The strong aluminum trend is expected to continue for the time being."
Researcher Kim analyzed, "Among non-ferrous metals, aluminum is the item with the most supply disruption issues," noting, "There is a possibility of supply disruption from Russia, which accounts for 5% of the world's aluminum production."
He added, "There is also an issue of production cuts at European smelters," explaining, "As energy supply instability continues, European electricity costs have risen sharply, leading to smelter production cuts."
He introduced, "Electricity costs account for about 30% or more of aluminum production costs," and stated, "Following Norway's Norsk Hydro, Alcoa also announced the suspension of operations at its smelter in Spain."
Researcher Kim said, "The spread of resource nationalism will also affect aluminum prices," explaining, "Last month, Indonesia, the world's second-largest bauxite exporter, announced a suspension of raw ore exports." Furthermore, he added, "Following the past nickel ore export ban, Indonesia's resource nationalism tendency is gradually spreading to other metals," and "Recently, Indonesia has also mentioned the possibility of imposing export taxes on nickel semi-products such as ferrochrome and nickel pig iron [NPI]."
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