67 WALL STREET, New York - April 15, 2013 - The Wall Street Transcript has just published its Metals and Mining Report offering a timely review of the sector to serious investors and industry executives. This special feature contains expert industry commentary through in-depth interviews with public company CEOs and Equity Analysts. The full issue is available by calling (212) 952-7433 or via The Wall Street Transcript Online.
Topics covered: Precious Metals, Global Iron Ore Production, Emerging Market Infrastructure Construction, Midcap and Small-Cap Consolidation Activity
Companies include: Noranda Aluminum (NOR) and many more.
In the following excerpt from the Metals and Mining Report, an expert analyst discusses the outlook for the sector for investors:
TWST: Some say the aluminum industry is currently going through a demand and supply imbalance. Has any of this had impact on Noranda?
Mr. Smith: Let me take that in two parts. First, from a consumption/production standpoint, we believe the market is in balance globally, and in a deficit in many regions including the U.S. Granted, that balance does not appear to matter much right now to the price of aluminum because the quantity of metal stored in warehouses continues to be at historically high levels. But for a variety of reasons, very little of that metal is available for consumption, a fact that is driving higher regional premiums, like the Midwest premium that factors into the pricing of our products.
Second, as an aluminum producer, certainly the London Metal Exchange, or LME, aluminum price has a significant impact on our results. And frankly, because of our integration, our long positions in bauxite and alumina, and the fact that we don't link input costs to the LME aluminum price, our results are highly leveraged to changes in that price. A 10 cent change in the per-pound LME aluminum price drives a 13 cent per pound change in our EBITDA. In an environment of improving or robust aluminum prices, it's a pretty easy story to tell.
But we have little, if any, influence over the LME aluminum price. And we are not currently in an environment where that price is improving. But we believe that strategy I mentioned earlier provides us the platform to create value across the cycle, because we are so passionately focused on managing our costs, and because our products attract additional premiums.
TWST: When you look at your own products, how confident are you in your ability to forecast? What do you see as demand levels and pricing?
For more of this interview and many others visit the Wall Street Transcript - a unique service for investors and industry researchers - providing fresh commentary and insight through verbatim interviews with CEOs, portfolio managers and research analysts. This special issue is available by calling (212) 952-7433 or via The Wall Street Transcript Online.