Over the course of cycles and economic conditions, its share price oscillates with the regularity of a metronome between a valuation floor of around x0.5 on equity and a ceiling of x1.5 on equity.

Periods of relative bliss - characterized by dynamic industrial demand and constrained production capacity - are invariably followed by painful periods of contraction. Mainly used in the automotive, aerospace and construction industries, aluminum is a reliable thermometer for gauging the temperature of the global economy.

As far as Alcoa is concerned, there are both good and bad aspects to the current economic climate. The good is the neutralization of part of Russian supply, once the market leader but now under sanctions; as well as the fall in the cost of raw materials - coke, natural gas, caustic soda, etc. - which management expects to see in the coming years. - which management expects to continue next year.

The downside is the freeze on new construction in China, and Chinese aluminum producers dumping the inventories they have been unable to sell on the domestic market for export. This, among other factors, has already caused the metal price to fall by around 20% in 2023 compared with the previous year.

As a result, Alcoa's sales fell despite a 5% rise in production. The Group also posted a book loss of $651 million and burned $440 million in cash, while net debt doubled over the last twelve months.

This is the second year of negative cash flow in ten years for the American group. Despite a difficult business environment, a crippling pension plan and costly environmental obligations that limit its ability to return cash to shareholders, Alcoa deserves credit for having managed to survive and largely self-finance over the period.

But that's only seeing the glass as half full. If we were to see the glass as half-empty, we would be quick to point out that the current valuation is still higher than the value of shareholders' equity, and remains too expensive for an underlying business whose profitability is as uneven as it is anemic.