The Hindu Business Line : Aluminium counters weather selling spree

THE aluminium counters today withstood the selling onslaught in the stock market. According to analysts, the steady LME prices for aluminium since March have provided strong clue to the earnings for the domestic outfits.

Dealers said that though there had been a general scramble by traders and operators to exit from industrials today, aluminium stocks did better than most.

Hindalco and Sterlite Industries prices, which came down from their intra-day peaks, closed higher. Nalco and Malco finished marginally lower after seeing substantially higher tops. Nalco saw improved volumes. Analysts pointed out that in March LME prices of aluminium (ingot) saw the recent peak of $1,723 per tonne. The April average price was $1,676 a tonne and in May, so far, the LME prices moved between $1,580 and $1,650. "If this trend continues, domestic players like Nalco and Hindalco, who are considered globally lowest cost producers of aluminium, would make super profits this fiscal," felt Mr Kunal Bose, a commodity analyst.

A top corporate portfolio manager said that Nalco, being a pure player in aluminium, is best placed among the domestic manufacturers to reap the price benefit. In the case of Hindalco, its business mix is 52 per cent for copper and 48 per cent in aluminium. Globally ruling low rate of conversion price (TCRC) has kept the copper operation much less remunerative.

Sterlite (it holds 51 per cent Balco) is also a mixed bag of aluminium, copper and zinc. Malco, an outfit from the Anil Agarwal stable, has vastly improved its financials through higher capacity utilisation and cost reduction. It has copper and zinc in its basket.

Going by the international consumption and supply trends, experts feel the aluminium prices are likely to remain steady this fiscal. If the 7 to 8 per cent GDP growth rate projection was realised, the growth in consumption in the domestic market might see at least a similar trend, if not more, during 2004-05.

More Stories on : Stock Markets | Aluminium

Article E-Mail :: Comment :: Syndication :: Printer Friendly Page

Stories in this Section
Benchmark launches FoF

Alok Industries plans FCCB issue

Bear onslaught

LSE targets 10 mid-cap Indian cos for listing

Market mood hit by CMP blues — Sensex plunges 223 points

Aluminium counters weather selling spree

Vishal Exports lists at discount to offer price

Punjab Tractors steady

`Zooms' on fund interest

Reliance: Outlook negative, sell June futures

Sensex tumbles on broad-based selling

Trinethra makes expansion plans in AP

SEBI restricts execution of share splits before IPO