The giant aluminum producer Alcoa posted better second quarter profits than analysts expected on Monday evening, leading to a rise in both the company’s shares and the price of aluminum futures on Tuesday.
Alcoa said that earnings for the second quarter were $136 million, a significant improvement over a loss of $454 million in the second quarter of 2009. Revenue rose 22 percent to $5.19 billion.
Overall, the company’s shares opened higher at $11.30 per share, although by midday trading some of those gains had eroded and the stock was only up 1.01 percent at $10.98 per share.
The company also said that global aluminum consumption will increase by 12 percent this year, rather than a projected 10 percent. Aluminum futures gained around 0.4 percent today, according to BusinessWeek/Bloomberg News, building on a 26 percent gain in the last year.
However, the looming specter of a deflation in China’s property bubble has some analysts worried that the rally in industrial commodities may be short-lived.
“We see a new round of declines looming on macro uncertainties,” Shi Wenzhu, an analyst at Great Wall Futures in Shanghai, told Bloomberg. “Demand prospects in China are turning bearish too now that we’re in the low-production season.”
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