To The Moon

The unprecedented bull market in commodities led Alcoa, a century old enterprise, back to its peak. Calculated from the lowest point of 5.16 in March 2020, Alcoa has completed a 10 times share feat in just two years, showing the attractive charm of cyclical stocks! This is the first time since the 2008 financial crisis. Recently, the futures price of LME ALUMINUM reached US $3299 / ton, a new high since 2008! There are three main factors driving the current LME ALUMINUM Market: First, due to the global energy crisis, the cost of electricity remained high, and smelters suffered serious losses and stopped production one after another; Second, the epidemic spread in Guangxi, and the relevant aluminum industry chain stopped production; Third, the Russian Ukrainian crisis is fermenting, and the market is worried that Russia will exacerbate the supply shortage after being sanctioned. At present, Goldman Sachs predicts that the aluminum price may rise to $4000 / ton in 2022, with 21% room according to the current price. From the supply side, due to the interference of the epidemic, all kinds of commodities are rising, and the world is deeply in inflation. In Europe, since the middle of last year, the electricity price of major European countries has increased significantly. Taking Germany as an example, in June 2021, the electricity price was about $80 / MWh, and the highest rose to $488 / MWh in December. The electricity price has increased five times, resulting in a significant increase in smelting costs and serious losses for non-ferrous metals with high power consumption such as aluminum, zinc and nickel. In December, electrolytic aluminum enterprises such as aldel and akoa began to reduce production Stop production. Behind the power shortage is the fermentation of the energy crisis. In Europe, new energy, nuclear energy and natural gas power generation account for 24%, 22% and 19% respectively. In 2021, the wind power in Europe was insufficient, and the natural gas inventory was at a low level. Combined with winter heating and the crisis in Russia and Ukraine, the power tension worsened. Back in China, sports carbon reduction has pulled some coal production capacity out of the historical stage. In the second half of last year, local power rationing and aluminum industry chain, as a representative of high energy consumption, are the hardest hit areas of shutdown. Judging from the current situation, the factors leading to the surge in aluminum prices are not solved for the time being, but due to the cyclical fluctuations of aluminum prices, the current price, if not the top, has entered the fishtail market. According to the $4000 / ton predicted by Goldman Sachs analysts, the current rising space of futures prices is about 20%. Judging from the stock price trend of Alcoa, it is basically synchronized with LME ALUMINUM. Looking at the stock price trend of Alcoa over the years, once the aluminum price enters the decline cycle, the stock price will suffer a devastating blow: This kind of strong cyclical stocks should be sold in the high business cycle, rather than rushing in, unless you can leave in time when the bell rings. Judging from the Pb valuation, Alcoa has reached an all-time high. Even if it reaches an all-time high, it is just a tragic outcome that has never been seen before and will never come again: It may be the most rational choice for investors to fry and cherish and seize the final Carnival of Alcoa. In any case, remember that cyclical stocks should not be owned for a long time. Remember to make profits and leave the market in time!$Alcoa(AA)$