NEW YORK, NY--(Marketwire -07/11/12)- It has been a tough year for aluminum companies as high supply and low demand, due to the global economic slowdown, have seen prices for the commodity fall 20 percent since March. On Monday, benchmark three-month London Metal Exchange Aluminum was at $1,925 a ton, just above the low of $1,880 set in June 2010. The Paragon Report examines investing opportunities in the Aluminum Industry and provides equity research on Alcoa Inc. (AA) and Rio Tinto (RIO).
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Aluminum giant, Alcoa, earlier this week reported that it posted a second-quarter loss, compared to a profit in the year-ago quarter. Despite the loss the company's total revenues for the quarter, $5.96 billion, beat analysts' estimates of $5.83 billion. Alcoa remains optimistic going forward as they reaffirmed their forecast that global demand for aluminum will increase by 7 percent this year.
"Although aluminum prices are down, the fundamentals of the aluminum market remain sound," Klaus Kleinfeld, Alcoa chairman and CEO, said in a statement.
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Alcoa reported $0.00 earnings per share, based on a loss from continuing operations of $2 million, which includes special items of $63 million. Second quarter 2012 revenue was $6.0 billion, steady sequentially and down 9 percent compared with second quarter 2011, primarily due to an 18 and 17 percent year-on-year decline in the realized metal price and realized alumina price, respectively.
Rio Tinto Alcan, the aluminum product group of Rio Tinto, a global leader in the aluminum industry. Their facilities include high quality bauxite mines and alumina refineries, as well as technologically-advanced primary aluminum smelters. For the first quarter 2012, Rio Tinto reported Bauxite and alumina production were 10 percent and 13 percent higher than the first quarter of 2011. Aluminum was nine per cent lower primarily reflecting the orderly shutdown of two thirds of capacity at Alma.
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