Commodity metals are having a tough time lately. Investor enthusiasm for metals has fallen, and its only necessary look at the price of gold to see why. Equities are where investors want to be and you cannot blame them when every day’s trading puts up a new top.

But the rotation out of commodities may itself be starting to reverse, at least for some base metals. And demand is booming one of the metals.

Aluminum

The commodity price for aluminum may have gotten ahead of fundamentals in the short term, but some analysts think the second half of the year will bring sustained higher prices. Others see sustained overproduction and lower prices.

Alcoa Inc. (NYSE: AA) has seen its share price increase more than 30% so far in 2014, after rising 18% in 2013, with most of the gains coming since last October. Alcoa shares closed at $13.79 on Tuesday, and the consensus price target for the stock is around $12.30. So we could conclude that Alcoa, like aluminum in general, has outrun its fundamentals. For the current quarter, Alcoa is expected to post earnings per share of $0.12 on revenues of $5.64 billion.

Rio Tinto PLC (NYSE: RIO) is generally thought of as a producer of iron ore, but it is also the world’s second largest producer of aluminum. Shares are up just 1.8% year-to-date and 22% over the past 12 months. Based on Tuesday’s closing price of $56.05 and a consensus price target of around $62.20, the potential upside on the stock is about 11%. Rio Tinto could also feel pressure from a drop in iron ore sales to China.

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Copper

The price of copper made something of a comeback in April following a four-year low posted near $2.90 a pound in March. Prices have recovered to around $3.13, nearly to their level before the March crash. When Indonesia banned copper exports early this year, the big mining companies rebelled and the situation is not yet sorted out.

Freeport-McMoRan Copper & Gold Inc. (NYSE: FCX) has sought relief from low copper prices by acquiring oil exploration and production companies. That move paid off in the first quarter when the company was able to produce more oil than expected at a lower-than-expected cost per barrel. Gold prices didn’t help Freeport in the first quarter either. The company’s stock closed at $35.56 Tuesday, compared with the consensus price target of around $39.40. The implied gain at that closing price is around 10.7%.

Southern Copper Co. (NYSE: SCCO) had a poor first quarter and there are some who believe that the revenue drop-off will continue through the rest of this year. The company simply has nothing to offset the sharp drop in copper prices. Shares closed at $29.44, against a consensus price target of around $34, for an implied potential gain of 11.7%.

Nickel

Prices for nickel jumped nearly $2,000 per metric ton in just a few days last week, and it currently trades at more than $20,000 per tonne. Analysts at Citibank do not believe that $30,000 per tonne is out of the question either. The ban on shipments of ore out of Indonesia is having a more dramatic impact on nickel prices even than on copper prices.

Vale S.A. (NYSE: VALE), the world’s second largest producer of nickel, is also the big problem. The company’s Goro mine has been shut down following an effluent spill, and the New Caledonian operation has never lived up to its advance billing when it comes to production. For an iron ore miner as big as Vale, nickel is an afterthought, but its high prices will also raise the price of stainless steel. Vale closed at $13.88 on Tuesday, versus a consensus price target of around $18.50, yielding a potential gain of 33%.

BHP Billiton Ltd. (NYSE: BHP) gave up its stake in the proposed Pebble Mine in Alaska after the U.S. Environmental Protection Agency issued a ruling forbidding an approval for the project. BHP is also looking to divest all but its iron ore, copper, coal and oil businesses, but those divestitures depend on the company finding a willing buyer at what BHP considers a fair price. Easier said than done. The stock closed at $71.43 on Tuesday, against a price target of around $63. No upside here.

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Zinc

Zinc prices have begun to come back, and the three-month futures price now approaches $2,100 per metric ton as inventories in the LME warehouses dwindles. Prices are expected to continue climbing as a forecast production deficit of 117,000 tons is on tap for 2014.

Teck Resources Ltd. (NYSE: TCK) plans to restart its zinc mine in Pend Oreille, Ore., which has been idle since 2009. The company is also laying off about 5% of its global workforce as prices for its other commodity major minerals — copper and coal — also remain low. Teck’s stock closed at $23.41 on Tuesday, compared with consensus price target of $28.60. The implied upside here is 22%.

The obvious value choice among these stocks is Vale, at least based on its implied gain. The problem is that base metals do not account for more than about 18% of the firm’s revenue. The company’s iron ore business drives revenues and profits, and some analysts are forecasting an oversupply of nearly 80 million tons this year and nearly double that next year. Nickel remains strong, but it will not make up for a huge drop in iron ore prices.

Rio Tinto’s dependence on iron ore puts it in the same boat. Alcoa is already overbought, and Southern Copper faces soft prices for its namesake metal. The last man standing is Freeport, and that is on the strength of the company’s growing oil business. But the company is going after deepwater prospects in the Gulf of Mexico, where costs and risks are high.

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