--> Definetly better news flow & momentum, sector could a good play for next few weeks.
- Upgrade on tightening aluminum market and rising regional aluminum premiums on earnings.
* GS is Upgrading NHY to Buy See note attached
Following three years of weak aluminium pricing, we believe 2014 will be the trough and that strong global demand growth (c.7% in 2015E) combined with limited supply growth beyond 2015 as well as a more aggressive approach to capacity management by producers will lead to a recovery in pricing in 2015/16. As a scale producer, Norsk Hydro has significant earnings leverage to rising aluminium pricing. Incorporating our Commodity team’s new aluminium price forecasts into our numbers, we revise our 2013/14/15E EPS to Nkr0.74/0.59/1.46 (from Nkr0.66/0.79/1.34) and upgrade the stock to Buy with our new 12m price target implying 28% upside.
*Aluminum Stockpiles in Japan Drop From 6-Month High in December {NSN MZOGZK6JTSE9 <go>}