Why Century Aluminum Stock Is Moving Higher Today

On Monday, a new round of sanctions against Russian metal supplies reverberated through global markets. The largest U.S. supplier of aluminumCentury Aluminumfirms(Century) Aluminum (Nasdaq resonance)Stock Code(CENX)'s shares were up 10% by midday as investors try to gauge the impact of the latest geopolitical action.

The Political Squeeze on Russian Metal

On Friday, the United States and Britain announced new restrictions on Russian-origin aluminum, nickel and copper, opening a new front in the economic battle with Russia. The measures do not prevent Russia from selling metals to buyers outside the U.S. and U.K., but they do limit Russia's access to the London Metal Exchange.

The exchange's prominence as a broker for the global metals industry will at least temporarily boost metal prices.

Century Aluminum, a major U.S. aluminum producer with operations in Kentucky, South Carolina and Iceland, should be well positioned to fill the void. The company should also benefit from higher metal prices as a result of the sanctions.

Is Century Aluminum stock worth buying?

With investors excited about a major new smelter project that will translate the U.S. aluminum industry, the stock has risen 40% this year, even before the sanctions were announced. the long-term demand for lightweight metals is huge, and Century Aluminum appears to be well positioned to capture a significant portion of that demand, regardless of geopolitical circumstances.

As much as possible, with the stock's recent jump, a lot of potential seems to have been factored into the stock's price. Considering the cyclical nature of commodities and the tendency of Century Aluminum's stock price to fluctuate with the price of aluminum, investors would be wise to avoid buying today and wait for a potential downtrend in the future.

Should you invest $1,000 in Century Aluminum now?

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Lou Whiteman does not own any of the shares listed above.The Motley Fool does not own any of the shares listed above.The Motley Fool has a disclosure policy.

Why is Century Aluminum stock soaring today?