August 23,
2001
Aluminium Sector Update – August
2001
Aluminium production
slowing down…
Aluminium production
registered a decline of 14% in June 2001 as compared to the
corresponding period in the previous year. Production declined by
13% during April-June 2001 as compared to an 8% growth in the same
period last year. The production of aluminium has been declining
since March 2001. The fall in production reflects the drop in
aluminium production at Balco. Also, there has been a slowdown in
the demand for aluminium due to the overall slowdown in the Indian
industry.
Table 1: Production
(in tonnes)
|
Production
|
Jun-01
|
Jun-00
|
%
Change
|
Apr-Jun
2001
|
Apr-Jun
2000
|
%
Change
|
| (tonnes) |
|
|
|
|
|
|
| Aluminium |
45436
|
52757
|
(13.9)
|
138036
|
158741
|
(13.0)
|
Source: Industry
Chart 1: Aluminium
Production
Source:
Industry
Aluminium prices
decline…
Prices of aluminium ingots declined
to Rs 94/kg in August from Rs96/kg in June 2001. The average
aluminium price was Rs96/kg during April-August 2001, which is a 5%
rise over the average price in the corresponding period last
year.
The temporary shutdown at Balco has
helped Hindalco and Nalco to increase prices. Hindalco has
increased the price of ingots to Rs 85,000 from its earlier price
of Rs 84,000. It has increased the prices of its rolled products by
Rs 1500. Balco raised its ingot price from Rs 82,700 to Rs 83,200.
Nalco has increased the prices of its cast strip by Rs
500.
Chart 2: Aluminium Prices (Ingot
prices in Mumbai market) (Rs /quintal)
Source: Industry
Chart 3: LME prices and
inventory
Source:
Industry
Major news
Indian
- Indal is likely to close down its
smelter at Alupuram in Kerala. The company may be forced to close
down its smelter unless steps are taken to supply power at a
discounted rate to the smelter within two months.
- Indian Aluminium is planning to
initiate negotiations with Canada based Alcan Aluminium and Norsk
Hydro to acquire majority stake of 50% in the $1bn Utkal Alumina
project in Orissa.
- The Government has begun
consultations with various merchant bankers for chalking out a
strategy to divest its stake in Nalco. DSP Merryl Lynch, ABN Amro
Bank and HSBC are among the merchant bankers who have made their
presentations to the government.
- The strike hit Balco operation is
returning to normalcy. Out of the 408 pots at Balco’s Korba
aluminium smelter, 375 have been restarted and are in
operation.
- India’s five aluminium
companies Nalco, Balco, Hindalco, Indal and Malco produced 1,36,119
tonnes of aluminium during the first three months of FY02 as
compared to 1,58,547 tonnes in the corresponding period last
year.
- There is uncertainty among the
extrusion units regarding the price of the primary metal of
aluminium used by them. About 70 units with an estimated 0.225
million tonnes capacity are said to be affected by the steep price
of the raw material.
International
- Noranda Aluminum has lowered its
August prices for aluminum ingot and billet shipped to customers by
3 cents a lb from July. It cut the unalloyed ingot P1020 sow price
to 72 cents a lb and reduced the base price for 6063 alloy
homogenized cut-to-length billet to 82 cents
- Alcoa would
partner with the world's top diversified miner BHP
Billiton of Australia. The two companies will merge their
North American metals distribution businesses: Alcoa's Reynolds
Aluminum Supply Company and BHP Billiton's Vincent Metals Goods and
Atlas Ideal Metals.
- Kaiser Aluminium Corp has reported
a second quarter net loss of $64.1 million or 80 cents a
share.
- Danmetal A/S, the Denmark based
aluminium major has expressed interest in acquiring Pennar
Aluminium Company.
Sangeetha
Subramanian
