Foreign Markets Question
What's happining with ACH?
Aluminum is a high value commodity, so why is ACH doing so poorly?
Answers
2270 points
Oldman answered 2 months ago …
Aluminum Company of China had a great run, last year, peaking at about 78-80 USD. But rising costs for electricity, bauxite and shipping have cut into the profits. In addition, the Chinese Central Bank, to damp inflation and speculation, for the 5th time in the past year, raised banks' reserve requirements to 17+ %...making capital more costly for Chinese manufacturers.
China is in a tight spot when it comes to electricity: mostly it's coal- based (when the Northern areas had heavy snows this past winter, the electric plants couldn't get coal, they cut back and people froze to death!) China used to export coal, but now imports vast amounts from Canada & Australia...and Electricity - in huge amounts - is required for the electrolytic reduction of bauxite to aluminum.
China also has a cost problem in shipping bauxite...by sea or land, transport costs are up 100% or more, since this time last year.
I think that if ACH drops into the $25.00 range, it might be a decent long-term investment.
296 points
jester112358 answered one month ago …
I'm going out on a limb and predicting it will either increase in price, decrease in price, or possibly stay the same. Hope this helps. I actually own this stock so obviously I hope it will increase in value since there is a bit of an aluminum shortage.
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