According to Reuters, the world's largest producer of aluminum producer, Alcoa Inc. ( AA ) is targeting to hike the prices by 5% for certain coil and flat sheet products. The increased price would be charged for new orders from March 1, 2012.
The price hike would encompass the products like 2xxx and 7xxx HT Coil for coil products as well as Flat Sheet. The company hiked the prices of the alloys in response to their soaring demand in the aerospace industry.
In the recently reported quarter Alcoa reported an adjusted loss of 3 cents per share, missing the Zacks Consensus Estimate profit of 1 cent. Total revenues increased 6% year over year to $6 billion. The Zacks Consensus Estimate for earnings per share is pegged at a loss per share of 3 cents.
The company expects global aluminum demand to grow 7% along with a global deficit in primary aluminum supply. It also expects demand to increase from its long-term growth projects in China, Brazil, Australia, Jamaica and Suriname. It expects alumina and aluminum production capacity to increase in these overseas markets.
However, the rising energy and raw material costs are likely to constrain margin expansion, especially caustic soda. Moreover, higher-than-expected input costs or unplanned outages could negatively impact Alcoa.
Currently, the shares of Alcoa retain a Zacks #3 Rank (short-term Hold recommendation). It competes with the likes of Aluminum Corporation of China Limited ( ACH ) and privately held Rio Tinto Alcan Inc.
Based in Pennsylvania, Alcoa Inc. is among the world's leading producers of primary and fabricated aluminum and alumina. It involves mining, refining, smelting, fabricating and recycling of aluminum. The company employs approximately 61,000 people in 31 countries across the world.
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