Aluminum Prices Rebound Amid Mixed Market Outlook
Written by Emily J. Thompson, Senior Investment Analyst
Updated: 1 day ago
0mins
Source: seekingalpha
- Price Rebound: Aluminum prices rose over 1.1% to above $3,120/ton on the London Metal Exchange despite Goldman Sachs' warning of faster-than-expected supply recovery from Middle Eastern smelters, indicating market optimism for producers' H1 earnings.
- Surging Producer Margins: Aluminum producers experienced significant margin increases in Q2 due to supply disruptions from the U.S.-Iran conflict, but the focus has shifted to supply recovery following the peace deal, leading to a price reversal.
- Shifting Supply-Demand Outlook: Goldman Sachs now forecasts a global aluminum market deficit of 100K metric tons in 2026, sharply down from its previous estimate of 720K tons, while raising its 2027 surplus estimate to approximately 1.5M tons from 590K tons, reflecting cautious market sentiment.
- Price Forecast Cuts: Goldman has lowered its Q4 2026 aluminum price forecast from $3,200/ton to $2,950/ton and its 2027 average price forecast from $2,950/ton to $2,700/ton, anticipating inventory rebuilds through 2027 that will normalize smelter margins.
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Analyst Views on AA
Wall Street analysts forecast AA stock price to rise
8 Analyst Rating
2 Buy
4 Hold
2 Sell
Hold
Current: 48.680
Low
38.00
Averages
57.63
High
78.00
Current: 48.680
Low
38.00
Averages
57.63
High
78.00
About AA
Alcoa Corporation is a vertically integrated aluminum company comprised of bauxite mining, alumina refining, aluminum production (smelting and casting), and energy generation. The Company's operations are comprised of two business segments: Alumina and Aluminum. The Alumina segment primarily consists of its bauxite mines and alumina refineries, and its operations include the mining of bauxite and other aluminous ores, as well as the refining, production, and sale of smelter grade and non-metallurgical alumina. The alumina produced by this segment is sold primarily to internal and external aluminum smelter customers; a portion of the alumina is sold to external customers who process it into industrial chemical products. The Aluminum segment consists of the Company's aluminum smelting and casting operations along with the Company's energy production assets in Brazil, Canada, and the United States. It has direct and indirect ownership of over 25 operating locations across eight countries.
About the author
Emily J. Thompson
Emily J. Thompson, a Chartered Financial Analyst (CFA) with 12 years in investment research, graduated with honors from the Wharton School. Specializing in industrial and technology stocks, she provides in-depth analysis for Intellectia’s earnings and market brief reports.
Aluminum Prices Rebound Amid Mixed Market Outlook
- Price Rebound: Aluminum prices rose over 1.1% to above $3,120/ton on the London Metal Exchange despite Goldman Sachs' warning of faster-than-expected supply recovery from Middle Eastern smelters, indicating market optimism for producers' H1 earnings.
- Surging Producer Margins: Aluminum producers experienced significant margin increases in Q2 due to supply disruptions from the U.S.-Iran conflict, but the focus has shifted to supply recovery following the peace deal, leading to a price reversal.
- Shifting Supply-Demand Outlook: Goldman Sachs now forecasts a global aluminum market deficit of 100K metric tons in 2026, sharply down from its previous estimate of 720K tons, while raising its 2027 surplus estimate to approximately 1.5M tons from 590K tons, reflecting cautious market sentiment.
- Price Forecast Cuts: Goldman has lowered its Q4 2026 aluminum price forecast from $3,200/ton to $2,950/ton and its 2027 average price forecast from $2,950/ton to $2,700/ton, anticipating inventory rebuilds through 2027 that will normalize smelter margins.
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- Economic Data Impact: The June ADP employment change rose by only 98,000, falling short of the expected 120,000, while the ISM manufacturing index decreased from 53.9 to 53.3, highlighting signs of economic slowdown that further pressured the market.
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- Strategic Adjustment Plan: The company aims to regain business by cutting costs and adding new products, intending to enhance its competitive position and meet the evolving demands of consumers.
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- Manufacturing Index Decline: The June ISM manufacturing index fell by 0.7 to 53.3, below the expected 53.9, reflecting a slowdown in manufacturing activity and exacerbating market concerns about economic deceleration.
- Inflation Expectations Improve: The June ISM prices paid sub-index dropped to 73.0, a four-month low, exceeding market expectations and suggesting easing inflation pressures that could influence the Fed's monetary policy decisions.
- Optimistic Earnings Outlook: Bloomberg Intelligence forecasts a 23% increase in Q2 earnings, primarily driven by AI infrastructure stocks, indicating market confidence in future profitability despite the current poor stock performance.
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- Employment Data Impact: The June ADP employment change increased by only 98,000, below the expected 120,000, signaling signs of a slowdown in the US labor market, which exacerbated market worries about economic growth and led to stock market pressure.
- Oil Price Decline: WTI crude oil prices fell nearly 1%, hitting a 4.25-month low, as positive negotiations between US officials and Iran improved expectations for energy supply, potentially affecting future oil price trends.
- Optimistic Earnings Outlook: Bloomberg Intelligence forecasts a 23% increase in corporate earnings for Q2, close to the 30% growth in Q1, indicating that AI infrastructure stocks will drive S&P 500 earnings-per-share growth, boosting market confidence.
See More
Aluminum Prices Rebound Amid Mixed Market Outlook
- Price Rebound: Aluminum prices rose over 1.1% to above $3,120/ton on the London Metal Exchange despite Goldman Sachs' warning of faster-than-expected supply recovery from Middle Eastern smelters, indicating market optimism for producers' H1 earnings.
- Surging Producer Margins: Aluminum producers experienced significant margin increases in Q2 due to supply disruptions from the U.S.-Iran conflict, but the focus has shifted to supply recovery following the peace deal, leading to a price reversal.
- Shifting Supply-Demand Outlook: Goldman Sachs now forecasts a global aluminum market deficit of 100K metric tons in 2026, sharply down from its previous estimate of 720K tons, while raising its 2027 surplus estimate to approximately 1.5M tons from 590K tons, reflecting cautious market sentiment.
- Price Forecast Cuts: Goldman has lowered its Q4 2026 aluminum price forecast from $3,200/ton to $2,950/ton and its 2027 average price forecast from $2,950/ton to $2,700/ton, anticipating inventory rebuilds through 2027 that will normalize smelter margins.
See More
US Stocks Close Lower with Mixed Tech Performance
- Market Decline: On Wednesday, the S&P 500 fell by 0.22%, the Dow Jones Industrial Average dipped by 0.03%, and the Nasdaq 100 dropped by 1.54%, indicating a market pullback after reaching a one-week high, particularly driven by sell-offs in chipmakers and AI infrastructure stocks.
- Economic Data Impact: The June ADP employment change rose by only 98,000, falling short of the expected 120,000, while the ISM manufacturing index decreased from 53.9 to 53.3, highlighting signs of economic slowdown that further pressured the market.
- Mixed Tech Performance: Despite strong performances from the Magnificent Seven tech stocks, with Meta Platforms rising over 8%, semiconductor stocks faced significant declines, as the iShares Semiconductor ETF fell more than 6%, reflecting a divergence in market confidence towards technology stocks.
- Oil Prices and Inflation Expectations: WTI crude oil prices fell by more than 1%, reaching a 4.25-month low, as positive developments in US-Iran negotiations eased market tensions, potentially influencing future inflation expectations and the Federal Reserve's monetary policy.
See More
General Mills Reports Earnings Beat, Shares Rise 8%
- Strong Earnings Report: General Mills reported adjusted earnings of $0.95 per share for the latest quarter, surpassing analysts' expectations of $0.80, indicating successful cost management and product diversification efforts.
- Stock Price Surge: Following the positive earnings report, General Mills' shares rose nearly 8% in afternoon trading, reflecting market optimism regarding the company's future growth potential.
- Strategic Adjustment Plan: The company aims to regain business by cutting costs and adding new products, intending to enhance its competitive position and meet the evolving demands of consumers.
- Positive Future Outlook: With the new fiscal year approaching, General Mills' strategic adjustments are expected to drive sales growth and further solidify its market position in the food industry.
See More
Mixed US Stock Performance as Chip Stocks Retreat
- Economic Data Impact: The June ADP employment change rose by only 98,000, falling short of the expected 120,000, indicating a weaker US labor market that pressured stocks, particularly in the chip and AI sectors.
- Manufacturing Index Decline: The June ISM manufacturing index fell by 0.7 to 53.3, below the expected 53.9, reflecting a slowdown in manufacturing activity and exacerbating market concerns about economic deceleration.
- Inflation Expectations Improve: The June ISM prices paid sub-index dropped to 73.0, a four-month low, exceeding market expectations and suggesting easing inflation pressures that could influence the Fed's monetary policy decisions.
- Optimistic Earnings Outlook: Bloomberg Intelligence forecasts a 23% increase in Q2 earnings, primarily driven by AI infrastructure stocks, indicating market confidence in future profitability despite the current poor stock performance.
See More
Meta's Cloud Business Expansion Drives Stock Surge
- Meta Cloud Business Expansion: Meta Platforms shares surged 11% on news of its plan to sell excess AI computing power to external customers, marking a significant expansion into the cloud business that is expected to enhance revenue streams and strengthen market competitiveness.
- General Mills Earnings Beat: General Mills reported fourth-quarter adjusted earnings of 95 cents per share on revenue of $4.61 billion, surpassing market expectations, and announced plans to achieve $3 billion in cumulative cost savings by fiscal year 2030, demonstrating strong profitability and cost control capabilities.
- Progress Software Strong Performance: Progress Software shares rallied over 18% after reporting second-quarter adjusted earnings of $1.62 per share on revenue of $253.5 million, both exceeding analyst expectations, with optimistic guidance for Q3 reflecting the company's sustained growth potential.
- Nike's Earnings Recovery: Nike's stock rose more than 4% as its fiscal fourth-quarter results exceeded analyst expectations despite a 12% year-over-year decline in China sales, showcasing the brand's resilience in the global market and potential for future growth.
See More
US Stocks Decline as Chip and AI Stocks Retreat
- Market Pressure Intensifies: The S&P 500 index fell by 0.47%, the Dow Jones Industrial Average by 0.22%, and the Nasdaq 100 by 1.09%, indicating market sensitivity to the retreat of chipmakers and AI stocks, reflecting investor concerns about future growth.
- Employment Data Impact: The June ADP employment change increased by only 98,000, below the expected 120,000, signaling signs of a slowdown in the US labor market, which exacerbated market worries about economic growth and led to stock market pressure.
- Oil Price Decline: WTI crude oil prices fell nearly 1%, hitting a 4.25-month low, as positive negotiations between US officials and Iran improved expectations for energy supply, potentially affecting future oil price trends.
- Optimistic Earnings Outlook: Bloomberg Intelligence forecasts a 23% increase in corporate earnings for Q2, close to the 30% growth in Q1, indicating that AI infrastructure stocks will drive S&P 500 earnings-per-share growth, boosting market confidence.
See More
