Aluminium stocks came under pressure on Thursday as aluminium prices on the London Metal Exchange declined for a second consecutive session, extending a pullback from two-month highs. National Aluminium Company, Manaksia Aluminium, Hindalco Industries and Vedanta Aluminium were among the stocks that fell, while MMP Industries and Maan Aluminium gained.
National Aluminium Company was the biggest loser among the stocks shown, declining 5.26%. Manaksia Aluminium fell 1.88%, followed by Hindalco Industries at 1.72% and Vedanta Aluminium at 1.71%. Arfin India was almost flat, down 0.05%.
MMP Industries rose 1.92%, while Maan Aluminium gained 1.24%.
The weakness in aluminium stocks followed a fall in global prices as concerns about a potential supply shortage eased after Emirates Global Aluminium said it plans to restore production sooner than expected.
The move came despite LME aluminium inventories remaining at their lowest level since 1990, keeping supply conditions in focus.
Additional supply support came from Australia, where the owners of the country's biggest aluminium smelter secured a A$2.5 billion government bailout on Thursday. The package will allow the 590,000-tonne-a-year Tomago smelter to continue operating.
The bailout was expected, but the move points to continued government support for aluminium production capacity that is operating at a loss.
Aluminium prices had climbed for seven consecutive trading sessions before reversing course. The metal fell for a second straight session on Thursday, settling 1.6% lower at $3,285.50 a tonne on the LME.
The latest decline came after Emirates Global Aluminium announced plans to bring production back to "pre-war levels" in the first quarter of next year. The company had suffered a production disruption after an Iranian strike shut its main smelter in March.
The earlier-than-expected production recovery reduced concerns about a tightening aluminium market and contributed to the decline in prices.
Aluminium prices had previously rallied as tensions between Iran and the US raised concerns about the Strait of Hormuz, an important export route for smelters in the region.
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