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The increase in alumina prices has forced producers to increase aluminium metal prices accordingly. However these mes have helped boost domestic majors to strengthen their financial positions and benefited Hindalco and Nalco, two of the three principal producers in the country.
Alumina prices have surged in leaps and bounds in the recent past to touch the all time high of $600 a tonne thereby, forcing producers to raise the aluminium prices proportionately. Despite having variations in price negotiations with users depending upon size of order and demand-supply scenario, the current average price for alumina is fixed at $580/t, much higher than the price at $220/t in January 2003. Aluminium Metal prices in India have accordingly jumped close to 40% in the same period to approximately Rs 125 000/t (US$2828) now.
The publicly owned National Aluminium Company Ltd (Nalco), presently exports about one million tonnes of alumina to the world market, mainly to China. Nalco produced about 1.5Mt of alumina in 2004-05 and, surplus to its own use, sold 22kt in the domestic market. Other Indian aluminium majors convert all their alumina to aluminium and neither export alumina nor sell it into domestic market. Alumina, hence, becomes a non-separable quantifying product of the producers like Hindalco Industries and Vedanta.
It should be mentioned that Nalco has been recognised as a star trading house for its substantial contributions to export of aluminium metal and calcined alumina to various overseas markets since 1991. Thereafter during 2000, Nalco' s status was upgraded to a super star trading house considering further growth in exports. Nalco has been making rapid progress in the field of alumina and metal exports, which have further gone up after the completion of its first phase capacity expansion. Already a global player in alumina with a share of about 8%, Nalco has now launched the second phase expansion to raise its alumina capacity to 2100kt and metal capacity to 460kt at an investment of Rs 40900M (US$925.3M). This project will substantially boost the company's export business in coming years.
The current upturn in alumina began in early 2003 which steadily surged to $500/t in March 2004 but dropped again to...