An exit strategy for Alumina

Alumina's share price has increased as industry conditions have improved. It's time to consider an exit strategy.

The investment case we outlined for Alumina back in Alumina: Lousy business, hot opportunity (Speculative Buy - $1.44) was as simple as Alumina is complex. The alumina market was changing from supplying integrated aluminium producers to supplying a growing third party market, mostly producers in China.

That distinction had forced a change in the price structure that would make alumina less dependent on aluminium prices and finally reflect its own costs of production. Prices, we argued, would eventually rise and industry profits would be restored.


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