Notice that Alcoa's (AA) back to where it was before it reported?
Some of that is because of the "light-weighting" thesis that CEO Klaus Kleinfeld has been preaching: the notion that trucks and cars need more aluminum because it is so much lighter than steel but just as tough.
But another factor is the continued rationalization of the company's facilities. Last night, Alcoa closed one more high-cost facility, this time in Massena, N.Y., that produced 84,000 high-cost tons of aluminum per year. This is all part of the 400,000-ton review that started last year. The goal is to move up Alcoa as a low-cost smelter because the commodity never seems to lift in value, so low-cost production is the only savior.
Alcoa is hated. When I praise Kleinfeld, I am told that I have a blind spot for him. I reiterate that he has done remarkably well in a horrendous industry. This move last night is just a continuation of the good news flow, like the introduction of Ford (F) pickup trucks' aluminum content the day before, and I expect a lot more good news (certainly more than bad) as the year continues.
Random Musings: Getting some real traction on my Nordic American Tankers (NAT) call. It has always been wrong to chase this stock; however, day rates have truly skyrocketed, so I would consider it interesting up here for a speculative position.