The Hindu Business Line : Aluminium stocks up on firm LME price

Kolkata, May 13 Local aluminium stocks reacted to higher aluminium prices on the London Metal Exchange. Nalco, the lowest cost producer in the world, moved up by over 6 per cent on Tuesday. Hindalco moved up by around 3 per cent.

Disruptions in production and supply of the energy-intensive metal owing to power shortages in China and South Africa early this year, and a current power shortfall in Brazil, Tajikistan and New Zealand; as well as relatively low inventory has rendered an upward bias in the prices for aluminium globally.

According to International Aluminium Institute, total output loss till now this year is estimated at over 7-lakh tonnes, around 2 per cent of the last year’s global production, one-third of which had come from China alone.

Sentimental response

Analysts felt this summer may see tight supply. However, the prices have started moving up since May 11 after a declining trend in the past one-month period or so and are still around 10 per cent lower than the all-time high.

Since Indian aluminium manufactures relate their prices to the LME rates, they stand to gain. This could be sentimental response in the short-term. But, analysts point out that the input costs have also been going up in the recent month reducing the margin. “Most of the aluminium producers in the country are low-cost and are in a better position than many others in different geographies,” a metal analyst said.

Sterlite Industries, with diverse interest in different metals including aluminium, however, declined by 3.53 per cent.

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