Exchange traded products that invest in aluminum followed Alcoa shares lower Tuesday morning after the Dow component reported quarterly results that disappointed Wall Street.
Alcoa said it swung to a profit in the first quarter as aluminum prices rose, but traders punished the stock and Alcoa shares were down about 6% in recent action.
The company said it sees a 12% increase in aluminum demand this year.
However, some Wall Street analysts think aluminum prices are set to take a breather.
BMO Capital Markets downgraded Alcoa to underperform after the quarterly results mostly on expectations of a weaker aluminum price in the quarters ahead.
“In terms of the industry outlook, demand for aluminum is rising in 2011 but so is supply,” BMO said in a research note.