Alumina (AWC) jumps with further Brazilian outages
Stock
Alumina (AWC) $3.04 as at 4/10/2018
Event
Alumina jumped out of the blocks today, trading over 9% higher this morning on the back of further issues to the Alunorte alumina refinery in Brazil. This refinery has already experienced problems this year after the waste dam being used spilled over, causing authorities to enforce a 50% capacity restriction on the refinery which isn’t likely to be lifted for another 12 months. Now the operator, Norsk Hydro, has announced it has shut production, further restricting the alumina and aluminium market forcing prices higher. A clear tailwind here for Alumina (the company) as the alumina (the commodity) market tightens further, already restricted by the capacity restraints on the refinery as well as US sanctions on Russian aluminium producer Rusal.
Alumina (AWC) Chart
Market Matters Take/Outlook
We were keeping an eye on Alumina before this event, unfortunately missing out on the jump today which at one stage saw Alumina up +14.7%. We are not looking to chase this bounce yet but may look at building a position around $2.80 or into weakness if the Rusal sanctions are lifted.
