Based largely on costs, Alcoa (NYSE:AA) is expected to continue to underperform their peers for the remainder of 2010.
A number of analysts agree with this, as those at JPMorgan (NYSE:JPM), Deutsche Bank (NYSE:DB) and UBS (NYSE:UBS) downgraded them in April.
Jim Cramer concurs with that as well, saying recently, "I've given up on Alcoa. I'd go with Dupont (NYSE:DD) or Dow Chemical (NYSE:DOW), where costs are also going down. I will not recommend Alcoa."
China imports are down while aluminum inventory levels at the Shanghai Futures Exchange have soared 64.4 percent, to 489,495 tons, up from 297,722 as of January 7.
With aluminum imports way down in China, with domestic production rising, and costs not under control at Alcoa, there's little in the near term to suggest they can do anything to change their current scenario.
Aluminum ETFs expected to launch later in 2010 are one glimmer of hope they have as far as demand goes, but Rusal is carrying the bulk of that load, and Alcoa would probably take up any slack Rusal can't provide, which I've heard they're having a hard time meeting expected demand from that new aluminum market.
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