Rusal Extension Could Kill Aluminum’s Rally

Alcoa Corporation shares fell nearly 15% on Monday – its biggest single-day loss in nearly 10 years – after the U.S. government extended the deadline for companies to terminate their relationship with Rusal, the Russian aluminum giant that is under sanctions. The extended deadline means that Rusal will have time to sell off large amounts of aluminum that it had stockpiled following the sanctions, which is likely to negatively affect supply and demand.

Aluminum prices fell around 8% on the LME on Monday, while shares of many related companies tumbled in response, including Century Aluminum Company  and Arconic Inc. , which both fell over 5%. Prior to the announcement, many analysts had been bullish on the market. Argus analysts recently noted that Alcoa would benefit from its pricing power amid the tighter market and reduced overall industry production. (See also: Alcoa Stock Breaks Out After Solid Q1.)

Aluminum prices fell sharply after the U.S. government extended the deadline for companies to terminate their relationship with Rusal. …read more

Read more here: Rusal Extension Could Kill Aluminum’s Rally

Category: AA, CENX, ARNC

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