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.

Shares of metal stocks such as Tata Steel, Hindalco, Vedanta and Nalco saw gains on Monday as the Nifty Metal index rebounded after six consecutive sessions of declines. What Happened: The recovery today comes as China’s Ministry of Finance announced the removal of export tax rebates on aluminium and copper products.

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),

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

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

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