Bullish on Alcoa Amid Changing Aluminum Supply Dynamics

30 days ago

Kevin Muir

"And so when I looked at this, I said, 'Hey, look, for the first time, we actually have a situation where the supply response in aluminum has changed. We're no longer going to see when aluminum prices go up, we're not going to see the Chinese going and just immediately making another smelter. We're not going to, in fact, they might actually be closing some of the other kind of less profitable smelters because it's wasted electricity. They should be using it for AI.' And so I got bullish on Alcoa. Alcoa is this old stock that nobody liked that absolutely nobody talked about. Over the last five years they've been quietly paying down debt. They've been going and immunizing their pension obligations, taking it off the balance sheet so that they're nice and clean."

Kevin Muir expresses bullish sentiment on Alcoa, highlighting a structural change in the aluminum market where Chinese supply is not immediately ramping up in response to price increases due to a shift towards AI investments. He emphasizes Alcoa's recent efforts in debt reduction and balance sheet cleanup, suggesting the stock presents an attractive value play amid broader market rebalancing.

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