Alcoa officials acknowledged thepossibility that they may have a position in the off-exchange
aluminum options market, but declined specific comment on trade
speculation that the company is holding a large outstanding
position.
    An Alcoa (Aluminum Company of America) source involved in
terminal trading for the company said: "We use all means
available to manage our business, so it's a possibility we're
trading options."
    "We won't go into specifics about what we're doing. But
when you're dealing in un-alloyed ingot, it's a commodity
business where there are a lot of tools available (for hedging)
and Alcoa is using all of those tools," said Al Posti, Alcoa's
manager of corporate news.
    Trade sources have said Alcoa is long call options equal to
30,000 to 50,000 tonnes of aluminum due to mature in April and
May. However, some New York-based aluminium traders said they
believe the size of Alcoa's position has been exaggerated.
    The possibility that Alcoa may be long call options is one
factor indicating that supply tightness may worsen in the
second quarter, traders said.
    "If they decide to exercise their right to buy, it would
mean really squeezing the market," one New York trader said,
noting that aluminum stocks on the London Metal Exchange were
90,500 tonnes at the end of last week.
 Reuter
