Here's Why Shares in Alcoa Slumped This Week
The sell-off may prove premature, as aluminum inventory levels remain relatively low and it's unclear when smelters in the Arabian Peninsula will return to full capacity.
Here's Why Shares in Alcoa Slumped This Week
Overview
Shares in alumina and aluminum products company Alcoa (NYSE: AA) declined by more than 15% in the week to late Thursday afternoon. The sliding share price comes at a time when commodity markets have begun to price in a reopening of the Strait of Hormuz as part of an agreement between the U.S. and Iran.
Having finished last week trading at about $3,400 per tonne, it's trading below $3,200 per tonne as I write. The price correction negatively impacted aluminum product companies this week, and it's no coincidence that Century Aluminum also declined by a mid-teens percentage for the week.
Details
While oil and liquefied natural gas naturally (pun intended) captured attention when Iran closed the Strait, a host of other commodities were also affected by the lack of commercial traffic through it. One of them is aluminum, given that the Middle East produces up to 9% of global aluminum production.
Source
Originally published at www.fool.com.
