What happened

Aluminum producer Alcoa Corp's (NYSE:AA) stock ended September up around 6%. That may not sound like much until you consider that competitor Century Aluminum Company (NASDAQ:CENX) fell 15% in the month. Some of Century's drop was just giving back a part of the huge gains it saw in August, but there's more to understand here.

So what

Alcoa makes aluminum, but aluminum isn't all it does. Alcoa's business spans the entire aluminum value chain. That's not the case at Century, where aluminum is all it does. In fact, Century's business is centered around producing primary aluminum. That means it has to buy the materials needed to make aluminum from others (such as Alcoa) while aluminum prices will be the main driver of top line results.

Someone holding a bar of raw aluminum.

Image source: Getty Images.

Alcoa, by comparison, is the largest bauxite miner in the world, the world's largest alumina refiner, and it makes aluminum. It's got more diversification built into its business and more ability to control its own costs. It's worth noting that Century Aluminum highlighted rising input costs when it reported second-quarter earnings in August -- solid quarterly results, despite the higher costs, drove the company's huge gain that month.

So when aluminum prices started a steep decline with about 10 days left in September, Alcoa's stock price dipped, but it didn't fall off a cliff. With assets across the aluminum value chain, it's simply better positioned to handle a little commodity adversity.

Now what

Alcoa is a solid option if you are looking for exposure to aluminum. A notable distinction here is that it touches every part of the aluminum process, including selling bauxite and alumina to outside companies so they can make finished aluminum. That makes Alcoa something of a mix between an aluminum company and a supplier to aluminum companies. A nice bit of additional diversification for those interested in investing in the upstream side of the aluminum business.

Reuben Gregg Brewer has no position in any of the stocks mentioned. The Motley Fool has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy.