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July 17,
2001
Aluminium Sector Update – July
2001
Production
declines…
Aluminium production
was 44,351 tonnes in April, the lowest production recorded in any
month since October 1998. Production in April 2001 was 13.1% lower
than production in April 2000. These declines mainly reflect the
impact of the strike by workers of Balco. However, since none of
the other producers were able to take advantage of the stoppage of
production, demand appears to have been affected. Signs of a
slowdown were evident in 2000-01 itself when aluminium production
growth was only 3.6% compared to 14.2% in 1999-00.
The main reason for
slowing down of aluminium production growth is the decrease in
demand from the automobile industry.
Table 1: Production
(in tonnes)
|
Production
(tonnes)
|
Apr-01
|
Apr-00
|
%
Change
|
Apr-Mar
2001
|
Apr-Mar
2000
|
%
Change
|
|
| Aluminium |
44351
|
51023
|
(13.1)
|
643123
|
620845
|
3.6
|
Source: Industry
Chart 1: Aluminium
Production
Source:
Industry
Aluminium prices
remain firm…
Prices of aluminium
ingots in the Mumbai market remained firm with the average price
during April-May 2001 being Rs9608/quintal, 6.6% higher than the
average price during April-May 2000.
Chart 2: Aluminium
Prices (Ingot prices in Mumbai market) (Rs /quintal)
Source: Industry
Chart 3: LME prices and
inventory
Source:
Industry
Major
news
Indian
-
The Nalco board of
directors has approved a 40% dividend payment for FY01. Nalco is
slated for disinvestment in the current financial year. The
government is considering disinvestment in Nalco by way of American
Depository receipts. Nalco would start dry run commissioning of its
alumina refinery in July, with full capacity reached within 3
months. Nalco is expected to expand its yearly alumina output
capacity to 1.57 million tonnes by October.
International
-
Alcoa Inc.’s
subsidiary casting business agreed to a five-year contract to
supply British aero-engine firm Rolls-Royce Plc. with castings. It
is planning to cut aluminum production at its Alumar smelter in San
Luis, Brazil, in response to the government's request to reduce
electricity consumption in some areas.
-
Alcoa Inc. has had
``very preliminary'' talks on a power-purchase deal with Canadian
utility BC Hydro that could reopen the Intalco aluminum smelter
that was idled as part of the power crunch in the western United
States. The company’s second-quarter net income fell 16
percent due to hefty charges for idling plants in the U.S.
Northwest, where power costs have soared. Alcoa's second-quarter
net income, including net charges of $114 million, fell to $315
million, or 36 cents a share, from $377 million, or 47 cents a
share, a year earlier.
-
Kaiser Aluminum Corp.
will sell part of its stake in a refinery that supplies the
company's Mead and Tacoma smelters. Kaiser would sell an 8.3%
interest in Queensland Alumina Limited for $189 million. It would
consider the rates increases announced by Bonneville Power
Administration (BPA) to see whether it would be feasible to restart
its primary aluminum smelter operations in the Pacific Northwest in
October.
-
Columbia Falls Aluminum
announced immediate closure of one of five potlines at 168,000 tpy
smelter in Montana due to rising power costs. Shutdown will cut
output by 33,000 tpy.
-
Aluminium smelters in
the United States have been cutting back output in recent months in
the face of surging power prices there.
Sangeetha
Subramanian
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Untitled Document
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