Men with burning jackets will rip off their clothes quickly. Sizeable quantities of aluminum tied up in financing deals will hit the market if interest rates increase and cash-and-carry trades that capitalize on the contango exhibited by aluminum futures become less profitable.
Overcapacity is still a major issue and will continue to provide headwinds to both the industry in general and Alcoa in particular.
Some competitors have not curtailed or right sized production and will be trapped in a low price hyper competitive price cycle before they go bankrupt.
George Gutowski writes from a caveat emptor perspective.