China’s decision to cancel this tax rebate, which has long supported its export-driven aluminum industry, sparked a sharp rally in aluminum prices on the London Metal Exchange on Friday. The move is expected to curb the excessive supply of Chinese aluminum abroad.

Hindalco, and Vedanta shares zoomed almost 10 per cent on the NSE (National Stock Exchange) after China rolled back a 13 per cent tax rebate given on copper and aluminium products. The shares of NALCO (National Aluminium Company) rocketed almost 10 per cent on the NSE (National Stock Exchange),

Chinese Aluminium exports represent 15% to 16% of the country's total production and 20% to 22% of production outside China.

Any tightening of the supply of aluminium and aluminium products globally are expected to benefit Indian producers.

The development is likely to curtail China's aluminium exports, thereby tightening global supply and driving up prices, ICICI Securities said