A surprise quarterly loss by US economic bellwether and aluminum giant Alcoa has created jitters as the metal used in everything from iPhones to soft drink cans hits headwinds.
Metals have slumped as hawkish central banks fight inflation, Europe faces an energy crisis and China’s economy struggles to recover.
Alcoa has posted an adjusted loss of $60 million for what it called a “challenging quarter” with significantly lower prices, and higher costs for energy and raw materials.
Bloomberg reports that aluminum has fallen by nearly half since reaching a record in March, when Russia’s attack on Ukraine sparked fears over supply.
Since then, China’s chronic property crisis and global monetary tightening have dragged on metals. The dollar’s surge has also been critical, making metals more expensive for buyers in other currencies.
The International Monetary Fund recently slashed its outlook for global growth and said one third of the global economy risks contracting next year.
The World Steel Association on Wednesday reversed an earlier forecast for modest demand growth for the alloy this year to calling a contraction.
Alcoa sank more than 6 per cent in aftermarket trading in New York last week after the announcement, and shares in aluminium stocks in Asia followed. Australia’s South32 – which runs Worsley Alumina in Western Australia – fell as much as 4.5 per cent.