A surprise quarterly loss by US economic bellwether and aluminum giant Alcoa Inc. added to jitters over the world economy as the metal used in everything from iPhones to Pepsi cans hits headwinds.
Metals have slumped as hawkish central banks fight inflation, Europe faces an energy crisis and China’s economy struggles to recover. Goldman Sachs Group Inc. says commodities are already pricing a 5% or more hit to industrial demand in major economies, and that more declines for metals are due through early 2023.
Alcoa, typically among the first of the world’s metals giants to deliver earnings, 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.
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.
