S32, RIO: Two ASX aluminium stocks in focus amid Russia-Ukraine war

March 06, 2022 09:56 PM PST | By Ashish

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S32, RIO: Two ASX aluminium stocks in focus amid Russia-Ukraine war — Image source: © Andreypopov| Megapixl.com

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Highlights

Aluminium prices have skyrocketed so far in 2022.

Russia is one of the major aluminium producers worldwide.

The spike in aluminium prices comes as a result of economic sanctions imposed on Russia by the West.

Aluminium prices have surged sharply in the global markets and are up by over 15% in 2022. The prices have surged in the wake of the West imposing economic sanctions on Russia in response to its Ukraine invasion. Russia is one of the major aluminium producers worldwide. The other key reason is that in the run-up to the ongoing Beijing winter Olympics, the Chinese authorities had restricted production to cut down on pollution and improve air quality. It resulted in lowering of aluminium output.

On that note, let us zero in on two ASX-listed aluminium stocks with over 25% year-to-date (YTD) returns:

South32 Ltd (ASX:S32)

South32 is a mining and metals company headquartered in Perth, Western Australia. The company mainly produces aluminium, manganese ore, zinc, and lead.

The stock of the metals & mining firm has given a year-to-date (YTD) return of over 32%. In the past one year, the stock has risen nearly 88%.

The company’s statutory profit after tax rose by US$979 million to US$1.032 billion in H1FY22. Strong production results across a number of operations and high operating leverage translated into an improved operating margin of 44% compared to 24% in H1FY21. The company also reported a 4% surge in alumina production during the period.

Rio Tinto Ltd (ASX:RIO)

Rio Tinto is involved in the search and extraction of a variety of minerals worldwide. Major products include aluminium, copper, diamonds, energy products, gold, industrial minerals, and iron ore.

The stock of the metals & mining firm has given a year-to-date (YTD) return of over 26%. In the past one year, the stock has climbed nearly 4%.

The mining firm reported a massive rise in earnings to US$21.1 billion (AU$29 billion) in 2021, a 116% rise from the previous year.

The company’s full-year aluminium production was at 3.2 million tonnes in 2021. Also, the company has given higher production guidance for 2022 amid rising industry demand.

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