Alcoa Corporation

Kalkine’s Global Tariff Report delivers objective, data-driven insights into key global sectors impacted by tariff fluctuations. It assesses how these changes influence equity valuations across affected industries, with a focus on trade-sensitive sectors that often attract increased investor attention during times of tariff-related uncertainty. The report also highlights defensive and countercyclical segments that tend to show resilience—or even outperformance—amid disruptions in global trade dynamics.

As illustrated in the table below, several key sectors in different countries are directly impacted by the recent tariff announcement from President Trump.

Key Highlights 

1. Australia’s Economic Advantage: The Productivity Commission of Australia projects a 0.37% GDP boost due to Trump’s tariff pause extension to August 1, 2025, and “liberation day” tariffs on aluminum, steel, and autos, which redirect global capital flows. It recommends avoiding retaliatory tariffs and reducing Australia’s low-yield “nuisance tariffs” to maximize gains. 

2. U.S. Baseline Tariff on Australia: As of April 2, 2025, a 10% tariff applies to most Australian imports under the “America First Trade Policy” to address trade imbalances.
   
   
3. Tariff Pause Extension: On July 9, 2025, Trump extended the tariff deadline from July 9 to August 1, 2025, via executive order, aiming to facilitate trade negotiations.
   
   
4. New Tariff Notifications: On July 9, 2025, Trump sent letters to nations including the Philippines, Brunei, Moldova, Algeria, Iraq, Libya, and Sri Lanka, announcing 20–40% tariffs effective August 1, 2025. Earlier letters targeted 14 other countries, such as Japan, South Korea, and Indonesia, citing trade deficits and pushing for better trade deals.
   
   
5. Copper Tariff Increase: A 50% tariff on imported copper was announced on July 9, 2025, justified by national security concerns due to copper’s role in defense and infrastructure, likely increasing costs for manufacturing and construction.
   
   
6. Canada Tariff Threat: Trump has proposed a 35% tariff on Canadian goods (excluding USMCA-compliant products) starting August 1, 2025. Existing 50% tariffs on steel and aluminum and prior 25% tariffs linked to fentanyl and migration issues remain active.
   
   
7. China Tariff Status: Tariffs on Chinese imports reached 145% in April 2025 but have been partially reduced to 30% under a 90-day truce, maintaining high trade barriers.
   
   
8. Pharmaceutical Tariff Plan: On July 8, 2025, Trump announced potential 200% tariffs on imported pharmaceuticals, with a 1–1.5-year grace period to encourage U.S.-based manufacturing.
   
   
9. Steel and Aluminum Tariffs: Since June 4, 2025, a 50% tariff applies to steel and aluminum imports from all countries except the UK, now extended to derivative products containing these metals.
   
   
10. Japan and South Korea: Japan faces a 25% auto tariff, with negotiations ongoing but complicated by Trump’s insistence on addressing trade imbalances. South Korea is seeking a deadline extension past July 9, focusing on non-tariff issues like foreign exchange and defence costs.

Global Implications of Tariffs

As of May 2025, Australia's Balance of Trade stood at AUD 2,238 million, down from AUD 4,859 million the previous period. The Current Account recorded a deficit of AUD 14,663 million in March 2025, slightly improved from AUD 16,315 million previously. This shift is reflected in the Current Account to GDP ratio, which fell to -2.1% in March 2025 from -2.4% earlier, having once reached 3.5%. In terms of trade activity, Exports in May 2025 were valued at AUD 42,402 million, slightly down from AUD 43,570 million, while Imports remained stable at AUD 40,164 million. External Debt remained relatively steady at AUD 2.69 trillion in March 2025.

The U.S. decision to double tariffs on Australian aluminum to 50% by 2025 presents a moderate but manageable challenge. Australia's choice not to retaliate reinforces its commitment to free trade, though global uncertainties and potential Chinese oversupply remain concerns. Strategic diversification into ASEAN markets and targeted industry support can help offset impacts. Meanwhile, the Productivity Commission finds that Australia could benefit from U.S. tariffs—if it avoids retaliation. Its modelling shows a potential 0.37% boost to real GDP, driven by gains in aluminum, steel, and automotive sectors. Further gains could come from reducing Australia’s remaining tariffs, enhancing global competitiveness.

The Australian aluminum sector remains attractive despite U.S. tariff concerns due to several key factors:

Amid elevated Market Volatility and Tariff pressures, Alcoa Corporation (ASX: AAI) stands out as a defensive pick within the Aluminum sector, supported by rigorous fundamental and technical research

Kalkine’s Global Tariff Report covers the Investment Highlights, Key Financial Metrics, Risks, Technical Analysis along with the Valuation, Target Price, and Recommendation on the Alcoa Corporation (ASX: AAI). 

Section 1: Company Overview and Fundamentals Insights

Company Overview: Alcoa Corporation (ASX: AAI) is a global producer of bauxite, alumina, and aluminum, with operations spanning mining, refining, smelting, and energy generation. The company got listed on ASX in July 2024. Kalkine’s Global Tariff Report covers the Investment Highlights, Key Financial Metrics, Risks, and Technical Analysis along with the Valuation, Target Price, and Recommendation on the stock.

1.2 The Key Positives, Negatives, Investment Highlights, and Risks

1.3 Top 10 Shareholders:

The top 10 shareholders together form ~3.42% of the total shareholding. Vanguard Investments Australia Ltd., BetaShares Capital Ltd. hold maximum stakes of 1.35% and 0.39%, respectively. 

1.4 Key Metrics: AAI’s gross margin increased to 27.6% in Q1FY25 compared to 7.5% in Q1FY24. Below is captured other metrics:

Section 2: Business Updates, Financial and Operational Highlights

2.1 Recent Business Updates:

2.2 Q1FY25 Results Highlights (for the 03 months ended 31 March 2025): Below mentioned are some key financial highlights:  

2.3 Historical Financial Trend

Section 3: Key Risks and Outlook:

Section 4: Stock Recommendation Summary

4.1 Price Performance and Technical Summary

The stock has increased by ~18.02% in the last three months, and over the six months, stock has decreased by ~19.74%. The stock has a 52-week low and 52-week high of AUD 36.20 and AUD 73.205, respectively, and is currently trading below the 52-week high-low average.

Markets are trading in a highly volatile zone currently due to certain macro-economic issues and geopolitical tensions prevailing. Therefore, it is prudent to follow a cautious approach while investing.

Note 1: Past performance is neither an indicator nor a guarantee of future performance. 

Note 2: The reference date for all price data, currency, technical indicators, support, and resistance levels is 14 July 2025. The reference data in this report has been partly sourced from REFINITIV.

Note 3: Investment decisions should be made depending on an individual's appetite for upside potential, risks, holding duration, and any previous holdings. An 'Exit' from the stock can be considered if the Target Price mentioned as per the Valuation and or the technical levels provided have been achieved and is subject to the factors discussed above. 

Note 4: Dividend Yield may vary as per the stock price movement. 

Note 5: Kalkine reports are prepared based on the stock prices captured either from REFINITIV or Trading View. Typically, REFINITIV or Trading View may reflect stock prices with a delay which could be a lag of 25-30 minutes. There can be no assurance that future results or events will be consistent with the information provided in the report. The information is subject to change without any prior notice. 

Technical Indicators Defined: -

Support: A level at which the stock prices tend to find support if they are falling, and a downtrend may take a pause backed by demand or buying interest. Support 1 refers to the nearby support level for the stock and if the price breaches the level, then Support 2 may act as the crucial support level for the stock.

Resistance: A level at which the stock prices tend to find resistance when they are rising, and an uptrend may take a pause due to profit booking or selling interest. Resistance 1 refers to the nearby resistance level for the stock and if the price surpasses the level, then Resistance 2 may act as the crucial resistance level for the stock.

Stop-loss: It is a level to protect further losses in case of unfavourable movement in the stock prices.