America’s largest aluminium provider, Alcoa, recently announced cuts its profit targets for the year amid trade tariffs and rising energy costs, causing company shares to drop 12%.
What is Alcoa?
Alcoa, also known as the Aluminum Company of America or by its ticker symbol AA, is one of the world’s largest producers of aluminium. Founded in 1888 and based in Pittsburgh, Pennsylvania, the metal producing company owns and operates several bauxite mines worldwide, boasts an attractive alumina refining system and a global aluminium smelting network.
What’s the latest company news?
On 18 July 2018, Alcoa reported cuts to its profits targets for the year, with increased trade tariffs and rising energy costs taking its toll on the aluminum giant. The company now expects earnings at around $3-3.2billion a drop from the expected level of $3.5-3.7 billion.
This coupled with additional taxes incurred from imports to the US from Canada of mined aluminum has caused the company’s costs to rise, with a self-estimated cost of around $15 million.
The question traders are asking is does Alcoa still hold the element of possibility, can it recover?
What will this mean for traders?
Whilst the drop in share price may not be so positive for Alcoa’s investors, the company has raised the issue of the effects of Trump’s trade tariffs and their effect on the US market. This has created a lot of speculation and volatility on the question of America’s economic growth.