Tuesday, May 4, 2010

Alcoa (NYSE:AA) Down on Lower Demand

Alcoa (NYSE:AA) attempted to push forward an expected increase in demand from the auto industry in 2010, but it didn't impress investors and the stock continues to be under downward pressure as other market sectors decrease in aluminum demand.

Major markets like construction, gas turbines and aerospace will fall in aluminum demand, although Alcoa still says that global consumption will rise. Traders weren't convinced, and the stock fell over 4 percent as a result.

Alcoa doesn't just have an aluminum demand challenge, but it also has foreign exchange rate obstacles and increases in energy prices which could squeeze margins and ultimately earnings.

China is the major reasoning behind the projected increase in aluminum consumption, but most companies are saying the same thing about their products as well.

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