Since August of last year, aluminum prices have rallied from a multi-year low of 82 cents a pound to the current price of 96 cents a pound. Some say the shape of aluminum's price chart suggest a breakout is imminent, while others say the breakout is already underway.
Either way, with aluminum prices on the mend, companies like Alcoa (NYSE: AA) and Century Aluminum (Nasdaq: CENX) are finding it's easier to turn a profit. If aluminum prices continue their march toward higher levels, then these companies may post far wider profits this year than anyone is expecting, making aluminum stocks a potential Cinderella story for 2013.
The past couple of years haven't been good for the aluminum industry. After aluminum prices peaked around a two-year high of $1.35 a pound in early 2011 and began to fall to that late-2012 low of 82 cents a pound, aluminum companies commensurately suffered. For example, Alcoa's per-share profit plunged from 72 cents in 2011 to only 24 cents per share in 2012. Noranda Aluminum Holding (NYSE: NOR) watched its bottom line slump from $1.05 a share in 2011 to 2 cents a share in 2012.
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