- Aluminum prices have bounced back sharply this year as smelters outside China have cut production.
- There is concern though that the rally might be stalled.
- The rally is likely to continue due to three important factors, which include lower-than-expected Chinese surplus, U.S. housing market gaining momentum and problems in Brazil.
- Aluminum prices will remain strong, which augurs well for Alcoa.
- Due to the robust outlook and current price level, Alcoa shares are a bargain.