Alcoa cops ratings downgrade

The persistent weak global aluminium market has resulted in Alcoa's Australian arm being hit with a ratings downgrade.

Ratings agency Moody's lowered Alcoa of Australia's rating to Baa2 from Baa1.

Such downgrades increase a company's risk profile and borrowing costs.

The move is related to the recent downgrade of parent company and global giant Alcoa Inc.

Moody's assistant vice president Matthew Moore said the headwinds pressuring the industry were expected to continue, including lower growth from China, a slow recovery in the US and ongoing weakness in Europe.

He said the company's outlook was still stable with low debt and well integrated operations including bauxite mines and alumina and aluminium production.

However, the rating could be further downgraded if things did not improve.

The company recently posted a sharp 81 per cent fall in profit last year to $106.2 million.

Australian-listed company Alumina has 40 per cent stake in the local company with the rest owned by Alcoa.