Alcoa Deal Not Certain

By contrast, nickel is impossibly tricky to produce in volume, and alumina is more common than copper ore.

Those underlying fundamentals leave some analysts predicting a broad softening. "Aluminum prices are past their peak," says Jeff Christian, managing director at New York-based specialty consulting firm CPM Group. He sees a 15% dip over the next 24 months or so.

Now let's presume that the folks at BHP and Rio Tinto, who already know all of this, decide to go ahead and jump further into aluminum anyway. The next question becomes, why Alcoa?

"It's not particularly cheap," says Brian Hicks, co-portfolio manager of (PSPFX Quote)U.S. Global Investors Global Resources Fund. The stock is currently trading at about 11 times consensus profit estimates of $3.09 a share for next year's earnings. While that might sound inexpensive relative to other industries, it's not when compared to the sector.

Freeport-McMoRan trades at a similar multiple, as does Alcan(AL Quote).

Hicks points to Century Aluminum(CENX Quote), which is selling for less than eight times next year's earnings, as a better value in the space.

Shares of Alcoa rose 6.4% to $35, Rio Tinto gained 3.1% to $216.94, and BHP advanced 2.3% to $45.02.

Then there is the question of what such an acquisition would do to the balance sheet of either acquirer.

Depending on how the deal is structured, it could put pressure on the debt ratings of the potential buyers, says Tom Watters, credit analyst at rating agency Standard & Poor's in New York. Currently, both the possible acquirers hold stable A+ ratings, while Alcoa was recently dinged down to a BBB+, he says.