On May 26, Alcoa rose 5.34% in regular trading, trading at $74.217/share, with trading volume of $111 million. The rally was driven by a continued positive reaction to UBS upgrading Alcoa from neutral to buy on May 22, combined with an escalating Middle East aluminum supply crisis.
UBS raised its price target on Alcoa from $75 to $80, arguing that the long-term supply disruption in the Middle East has not been fully priced into the company's valuation. Analyst Daniel Major noted that ongoing geopolitical instability in the Middle East has removed over 3 million tons of annual aluminum supply from the market, representing approximately 9% of global output and nearly one-quarter of production outside China. UBS projects a global aluminum supply deficit of approximately 1.8 million tons and expects aluminum prices to remain above $3,000 per ton over the next one to two years. LME aluminum has already surpassed $3,600 per ton. UBS also estimates Alcoa's adjusted net debt could fall below $500 million by year-end, potentially paving the way for share buybacks in the second half of the year.
Within the Aluminum sector, Century Aluminum rose 1.75%, Constellium NV rose 4.18%, Kaiser Aluminum rose 3.58%, and Tredegar rose 2.05%.
(The above content is based on publicly available market information, generated by a program or algorithm, and is intended solely as a stock movement alert. It does not constitute investment advice or a basis for trading decisions.)
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