Shares of aluminum makers declined after global aluminum major Alcoa on Wednesday raised a red flag for global aluminum demand.
Meanwhile, the S&P BSE Sensex was up 250.42 points or 0.65% to 38,849.41.
Aluminum shares fell across the board with the metal sector barometer, the BSE Metal index, sliding 1% to 8,804.52.
Hindalco Industries was down 1.81 % to Rs 184.55.
National Aluminium Company (Nalco) was down 3.84% to Rs 40.10. Nalco said that short supply of coal has severely impacted aluminium production of the company and also the cost of power, as the power purchased from the grid is costly as compared to the power produced by it at its captive power plant (CPP). The announcement was made after market hours yesterday, 16 October 2019.
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Presently three units of CPP, each of 120 MW capacity are under shutdown and further one more unit will be taken under shutdown due to coal shortage, Nalco said.
MCX Aluminium futures for 31 October 2019 settlement was down 0.37% at Rs 133.50.
US-based Alcoa Corporation is the world's eighth largest producer of aluminum, with operations in 10 countries.
Alcoa on Wednesday reported a net loss of $221 million for the third quarter 2019, compared with a net loss of $402 million in the second quarter of 2019. The firm reported third quarter revenue of $2.6 billion, down 5% sequentially due primarily to lower alumina prices.
For full-year 2019, Alcoa continues to project a global aluminum deficit, ranging between 800 thousand and 1.2 million metric tons, down slightly from the previous quarter's estimate of a deficit between 1.0 million and 1.4 million metric tons.
Global aluminum demand for full-year 2019 is now estimated to be lower year-over-year, ranging between negative 0.6% and 0.4%, compared to the previous quarter's full-year estimate of global demand growth between 1.25% and 2.25%. The change is driven by weakening macroeconomic conditions, trade tensions between the US and China, and contracting manufacturing activity, especially in the global automotive sector.
In the alumina market, Alcoa projects a global surplus for 2019, ranging between 1 million and 1.8 million metric tons, up from last quarter's estimate of 500 thousand metric tons to 1.3 million metric tons. The change is driven by faster restarts and expansions in the world ex-China as well as by lower alumina demand due to disruptions at several aluminum smelters in China.
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