2021 may well be the year of the precious metal to such an extent that mining companies are going from strength to strength and attracting very interesting investments from major influencers such as Elon Musk and Jeff Bezos, and that catalytic converters and other components with large numbers of desirable metals are being stolen in numbers not seen since the 1990s. It is not, however, just the precious metals such as lithium and vanadium that are currently in demand, but good old-fashioned steel and its alloys too.
This has become clear as Alcoa, the world's eighth largest producer of aluminium, is standing tall, with its stock at a six-month high on the New York Stock Exchange. Over the past six months, Alcoa stock has risen by an astronomical 105%, with the rise continuing until close of business yesterday, which resulted in a 9.76% rise on the 5-day average, with prices now resting at $43.87 per share.
This six-month high is very much tangible; however, analysts are looking at Alcoa stock trading near a 52-week high amid historically low implied volatility which has been a bullish combination for Alcoa stock in the past. According to a study from Schaeffer’s Senior Quantitative Analyst Rocky White, there have been two other times in the past five years when the security was trading within 2% of its 52-week high, while its Schaeffer’s Volatility Index stood in the 20th percentile of its annual range or lower. This is now the case with AA’s SVI of 47%, which sits in the lowest percentile of its annual range.
Aluminium price per ton has increased almost 25% in the last six months from $2,009 to more than $2,500, which has driven a sharp rise in Alcoa’s stock, with a 50% increase from January to June having been recorded, which has been further built upon from there.
Raw materials, despite the media's focus on 'big tech' and perceived environmental greenwash, are very much the order of the day and it is clear that metals as well as oil are in as great demand as ever.