AWC - Alumina Limited

[rederob]

AWC will be buoyed by current high prices - in fact the highest since the peak in 2008:

On the downside, AWC has been hit by higher energy and shipping costs in particular. Handysize freight costs are through the roof:

Covid has been a massive disrupter to global shipping, but prices have already abated and going forward are likely to halve.

On the plus side, aluminium is trending like copper into the future with demand expected to almost double over the next 30 years.

 

[Miner]

Noticed around a week ago or so that Alcoa (US markets) came up in movers list more than once.

I must've noticed it when in an zombie insomnia daze, I also remember reading something about bauxite problems or issues somewhere, but can't remember more than that. ?
I sometimes fall asleep reading something and wake up startled when I drop the phone... ha! ?

So, hopefully I can remember to do some Al and Ni checking this weekend, along with copper, cobalt...and where's lithium prices at these days, still smashing it?

Here a chart to show what I missed... Is it a Big keV deal, but wait, there's more?!

View attachment 130160

Enjoy weekend mate.
If you are Demon supporter, enjoy or just watch them.
My cricket team is in deep trouble at Manchester however.

 

[rederob]

Alumina (as distinct from aluminium) is AWC's big ticket item and as you can see from the chart below, its price has rocketed up recently (past month):

I don't know the extent that AWC is exposed to spot prices versus term contracts, so cannot put a price increase on AWC shares as a result.
However, it's also the case that aluminium prices are almost at all time record highs:

On the downside, Handysize freight rates are around a third higher than the June 2021 peak. However, the per tonne difference between freight and sales leans strongly towards AWC price upside, which is showing in the charts:

 

[rederob]

AWC gave its 3rd quarter update today, and it's in line with my previous post.

Alumina Limited’s CEO, Mike Ferraro, said “This has been another solid quarterly performance by AWAC even though production costs remained at elevated levels and alumina prices were subdued due to high freight costs. However, since the end of the quarter, alumina prices have surged from the third quarter average one-month lagged price of $292 per tonne to around $480 per tonne. The average one-month lagged API price for the fourth quarter to date is $410 per tonne which would drive AWAC’s cash margin significantly higher than the $55 per tonne achieved in the third quarter. The benefits of this increase will be reflected in AWAC’s fourth quarter results and the AWAC distributions to Alumina Limited in the first quarter of 2022."​

 

[Ann]

Reading the previous post of @rederob was very interesting, it reads so well for a fundamental investor, sadly that was just at the stage a chartist with alacrity would be thinking about an exit!

This is a chart I just put up in my KISS thread down in Trading Journals

This is a re-entry for me.

 

[rederob]

AWC is back in the good buy-in range again:

But more short term price weakness is on the cards:

 

[DrBourse]

Not many punters interested in AWC eh?....
Good stock for ST Trading...
No point in posting my analysis, unless anyone asks...

DrB.

 

[divs4ever]

Not many punters interested in AWC eh?....
Good stock for ST Trading...
No point in posting my analysis, unless anyone asks...
View attachment 155268
DrB.

bought into AWC in June 2012 ( @ 75 cents ) , reduced in July 2014 ( @ $1.445 ) and finally exiting in February 2015 ( @ $2.06 )

fearing rising costs ( especially energy costs ) would eat into profits

and until reading a discussion here at ASF about an alternate battery stock using Sodium Alumina technology today , had barely thought of AWC since ( stocks like S32 and CSR had been my main bauxite exposure )

however i am wondering if i have made a mistake ( or not )

cheers

 

[sptrawler]

bought into AWC in June 2012 ( @ 75 cents ) , reduced in July 2014 ( @ $1.445 ) and finally exiting in February 2015 ( @ $2.06 )

fearing rising costs ( especially energy costs ) would eat into profits

and until reading a discussion here at ASF about an alternate battery stock using Sodium Alumina technology today , had barely thought of AWC since ( stocks like S32 and CSR had been my main bauxite exposure )

however i am wondering if i have made a mistake ( or not )

cheers

You didn't make a mistake IMO, today $1.15.

I think things are getting very shaky in Australia with energy intensive industries, some must be at the crossroads as to continuing, or offshoring processing IMO.

Have held in the distant past, not interested in the current energy climate.

I'm no expert, but things don't look rosy ATM.

 

[frugal.rock]

Not many punters interested in AWC eh?....
Good stock for ST Trading...
No point in posting my analysis, unless anyone asks...

I'll bite. Can you please post your current analysis.
Previous channel well broken down now.

 

[divs4ever]

You didn't make a mistake IMO, today $1.15.

I think things are getting very shaky in Australia with energy intensive industries, some must be at the crossroads as to continuing, or offshoring processing IMO.

Have held in the distant past, not interested in the current energy climate.

View attachment 161334


I'm no expert, but things don't look rosy ATM.


View attachment 161335

selling back then turned out to be correct , but is buying back in at something close to $1 now also a good move

a move back to nuclear power-plants could be a game-changer for aluminum ( bringing energy costs back under control and predictable )

but investing is about buying when there is blood on the street ( but avoiding the rotten corpses )

is there a new market for aluminum ingots , coming around the corner or will aluminum price itself out of common use

 

[rcw1]

I'll bite. Can you please post your current analysis.
Previous channel well broken down now.

View attachment 161614

Good evening frugal.rock,

Some interesting times ahead with this one. Had held in the past. Fast traded and stuff ... The thing is the company declined to pay an interim dividend ): as it reported a $US42.9 million underlying half year loss.

In a nutshell reported loss due to modest prices and poor productivity forced by environmental factors and subsequent challenges such as demand for aluminium and alumina remains soft. The big issue over the past six months was the poor productivity at its three alumina refineries in Western Australia by refining low-grade bauxite.
Due diligence is needed to be aware of the environmental activist movement particularly over the potential impact on Perth’s drinking water dams.

Have a very nice night.

Kind regards
rcw1

 

[DrBourse]

I'll bite. Can you please post your current analysis.
Previous channel well broken down now.

View attachment 161614

Hi frugal.rock.....

AWC Financials are disgusting....
Their TA is obviously not much better....

The Progress Grid below shows that AWC FINANCIALS HAVE BEEN IN DECLINE SINCE 22/7/18....

And the chart below sums up AWC pretty well.....
The last few days candles reflect a slight Loss of Downward Monentum, but that is about the only +ive I can see atm - The Candles from 8/8/23 to today (and maybe more) will form another Benchmark Candle Formation - need to wait for a few more days B4 I can work that one out..... - but it will probably mean more bad news for AWC IMO....

Certainly NOT a Buffett Style Stock - matter of fact I don't like them either......

Cheers...
DrB.

 

[sptrawler]

selling back then turned out to be correct , but is buying back in at something close to $1 now also a good move

a move back to nuclear power-plants could be a game-changer for aluminum ( bringing energy costs back under control and predictable )

but investing is about buying when there is blood on the street ( but avoiding the rotten corpses )

is there a new market for aluminum ingots , coming around the corner or will aluminum price itself out of common use

My gut feeling is they will end up processing offshore, way too many issues here to be bothered with the hassle.
Alcoa has a loading facility at Kwinana, there is a rail connection, with the environmental issues, the labour costs, the associated production costs and the emission issues, exporting the raw material must be starting to look really attractive IMO.

 

[divs4ever]

My gut feeling is they will end up processing offshore, way too many issues here to be bothered with the hassle.
Alcoa has a loading facility at Kwinana, there is a rail connection, with the environmental issues, the labour costs, the associated production costs and the emission issues, exporting the raw material must be starting to look really attractive IMO.

they make/sell 'mini-nuke reactors now Australia has uranium deposits ( and some mining ) , it would make sense , so probably won't happen , Oz would rather buy obsolete nuclear subs to use up the uranium

 

[sptrawler]

they make/sell 'mini-nuke reactors now Australia has uranium deposits ( and some mining ) , it would make sense , so probably won't happen , Oz would rather buy obsolete nuclear subs to use up the uranium

We are talking bauxite, not uranium, Alumina haven't any uranium deposits.

 

[divs4ever]

We are talking bauxite, not uranium, Alumina haven't any uranium deposits.

but Queensland has and so has South Australia ( uranium deposits )

AWC need to contain energy costs and have some sort of energy price stability

AWC is going to have all sorts of issues relying on imported fossil fuels ( either at mine level or via the grid )

 

[Brenton5]

Looking at the ASX one can see the company is making large profits paying dividends but the stock value keeps on going down. Infact the trouble started back in 2007 and been on a slow decline every since. recent weeks it has gone down another 10 percent on my investment. -68% to -77% in a week. Not sure whether to ride it out or get out before it hits the floor. Looked at most of the data but cannot make any sense of it. Asking if anybody with more knowledge and experience than can explain whats going on.

 

[divs4ever]

Looking at the ASX one can see the company is making large profits paying dividends but the stock value keeps on going down. Infact the trouble started back in 2007 and been on a slow decline every since. recent weeks it has gone down another 10 percent on my investment. -68% to -77% in a week. Not sure whether to ride it out or get out before it hits the floor. Looked at most of the data but cannot make any sense of it. Asking if anybody with more knowledge and experience than can explain whats going on.

welcome to ASF

now i had a short ride in AWC a few years back , and have a small buy order in today

but with the aluminium industry in general they are very exposed to higher power costs ( as well as the usual stuff )

now some expect a housing construction down-turn ( lots of aluminium gadgets/fitting in the modern house/unit ) new cars seem to use more aluminum alloys/compounds , but only a switch from existing internal combustion engines to EV , looks to be positive trend there

but would that be balanced by demand for new war toys , planes,drones , and plenty of other stuff uses aluminum to reduce weight and logistics costs

now the pessimistic ( yep that includes me ) think the global economy is a train-wreck sliding towards a cliff , so the optimistic worry AWC has limited 'short-term growth and they mostly LOVE rapid gains

now i can't give you financial advice , but will get you to ask yourself a question ... is AWC ( in your opinion ) cheap at the current price ??

if so are you willing to grit your teeth and buy some more ..... or do you wait for some sort of bounce and reduce your losses ( no easy answer i know )

option C is 'leave them in the bottom-drawer ' and let them find their own destiny ( company failure , or take-over or a long term recovery .. whatever the future has in store for them )

 

[sptrawler]

+100 to what @divs4ever said.
I don't hold, but have held in the past, I'm not interested until the dust settles on whether processing is viable in Australia.