Aluminum Stocks : Aluminum is an extremely versatile metal. It is used to store drinks, set up structures, fly aircrafts and drive vehicles. Due to its widespread use and its high demand, experts predict that the demand for aluminum to increase at a 5% annual compound annual rate until 2026. One of the main reasons behind this forecast are a rising global economy after the COVID-19 epidemic and an increase in investment in infrastructure.
The forecast looks promising for stocks of aluminum. Let’s take a closer review of how investors can profit from the growing aluminum industry.
Aluminum stocks are at the top in 2023.
A number of companies are focused on making aluminum, or making it into higher-valued products. Some of the top players in the market are:
| TOP ALUMINUM STOCKS | TICKER SYMBOL | MARKET CAP | COMPANY DESCRIPTION | |
|---|---|---|---|---|
| ALCOA | (NYSE:AA) | $9.4 billion | An integrated, large-scale aluminum producer. | |
| ARCONIC | (NYSE:ARNC) | $2.3 billion | A company that focuses on the production of metals that are lightweight. | |
| CENTURY ALUMINUM | (NASDAQ:CENX) | $939.0 million | A major aluminum producer in the world. | |
| RIO TINTO | (NYSE:RIO) | $122.5 billion | A multi-faceted mining giant. |
Alcoa
Alcoa is an aluminum manufacturer that integrates, and is one of the world’s biggest mining companies for bauxite, the raw material that is that is used in the production of aluminum. Alcoa owns stakes in seven low-cost, high-quality Bauxite mines located situated in Australia, Brazil, Guinea as well as Saudi Arabia.
Bauxite is refined to Alumina in Alcoa refineries. Alcoa is one of the largest alumina business that is third party owned and has seven low-cost refineries located in Australia, Brazil, and Spain.
Then, Alcoa produces a variety of aluminum products using its casting and smelting operations. Alcoa also has a number of energy resources to cut down on carbon emissions and the cost produced by aluminum production. Three-quarters of its smelting portfolio operates using renewable energy sources.
Alcoa invests massively in R&D in order to lower its carbon footprint and enhance the sustainableness of its operations. Its most significant development projects are ELYSIS which is which is a joint venture together with Rio Tinto to develop a innovative aluminum smelting technique that has zero greenhouse gas emissions which they hope to commercialize in 2024. The company is also working on a project dubbed ASTRAEA to convert post-consumer scrap aluminum to pure aluminum. In the end, the company anticipates its capital expenditures to rise by 2024 for projects that promote sustainability and return seeking as well as the potential to increase its spending even more in the event that it goes ahead with certain of its initiatives.
Alcoa is also planning to return more cash to shareholders in the near future. The company will reinstate its quarterly dividend on the last day of 2021. It also expanded its share purchase program. The overall capital allocation strategy will position the company to create value growth in the coming years. 2024, which is when it will expand or begin implementing innovative technology projects.
Arconic
Arconic was once an element of Alcoa. But the aluminum producer broke up in 2016 to concentrate on its primary aluminum business. Arconic has recently completed its own spin-off process by breaking its engineered products as well as forgings into Howmet Aerospace (NYSE:HWM) in 2020 in order to concentrate on its main global roll products business.
Presently, Arconic is a leading producer of aluminum plate, sheet and extrusions. Arconic also produces unique architectural products for the construction, aerospace industrial, packaging and packaging markets.
Arconic expects the demand for its products will increase. For instance, automakers will need to construct more vehicles in order to make up for inventory shortages which will drive an 8percent annual compound growth in sheet auto body products. In addition, the increase in construction projects that are not residential should help boost the demand for aluminum-based building materials. It is making significant investments to satisfy the increasing demand and cut expenses. It should be able to boost it’s cashflow in the near future.
Century Aluminum
Century Aluminum is a global aluminum producer. It has three aluminum smelters within the U.S. and one in Iceland. It also runs aluminium reduction plants in the two countries. The facilities manufacture quality grade and value-added aluminum products.
Century Aluminum is investing heavily to reduce its carbon emissions profile. In the latter half of 2021, Century Aluminum signed an agreement to purchase electricity generated by two wind farms in the development phase in Iceland. The company also joined forces with the developer on a method for capturing carbon dioxide generated in its facility that developers could then use in the planned hydrogen plant adjacent to the site. These investments also support the company’s goal to create Natur-Al aluminum that has one of the largest carbon footprints in world.
Century Aluminum is also expanding the casting plant within it’s Iceland facility. This expansion will allow Century Aluminum to produce more products that are low carbon when it completes this $120-million project by 2024. The company also expanded their Kentucky as well as South Carolina smelters in 2021 to accommodate the rising global demand for aluminum.
