Aluminium prices surge, Indian producers may reap benefits : Rashtra News
#Aluminium #prices #surge #Indian #producers #reap #benefits
On a day when the Sensex dipped 4.72%, aluminium stocks fared comparatively well. Hindalco’s stocks remained near flat, though Nalco declined by 3.45% and Vedanta by 4.1%.
Indian aluminium manufacturers such as Vedanta, Hindalco and Nalco are likely to reap benefits as the price of the metal surged to a record high of around $3,449 per tonne on Thursday on the London Metal Exchange (LME) due to rising conflict between Ukraine and Russia, which commands around 12% of the international aluminium market.
On a day when the Sensex dipped 4.72%, aluminium stocks fared comparatively well. Hindalco’s stocks remained near flat, though Nalco declined by 3.45% and Vedanta by 4.1%.
At 4.1 million tonnes per annum (mtpa), India has the second-largest aluminium production capacity in the world, followed by Russia at 3.9 mtpa. China has the largest capacity.
Aluminium prices have already had an upward bias in the current year as the international market was facing around one million tonne supply shortage, mainly due to production cut by China.
The price of the metal increased by over 8% month-on-month in February to around $3,230/tonne. Russia’s absence from the market on account sanctions on exports from the country might help Indian firms to occupy the vacant space.
While Vedanta and Jindal Aluminium declined to hazard any guess price following Thursday’s developments, analysts believe prices will remain elevated as global supply will remain disrupted as the situation worsens. Continued disruptions will drive aluminium prices higher.
Hetal Gandhi, director, Crisil Research, said: “Domestic primary aluminium manufacturers are likely to see a positive impact in the near term given their low-cost position as it enables them to easily tap export markets. India already exports over 55% of the domestic primary metal and with supplies from Russia and Europe getting impacted, exports are expected to remain strong.”
Further, aluminium manufacturers are largely dependent on domestic coal (e-auction and captive) and are unlikely to see any major cost escalation due to rising energy costs which will provide a major boost to their profitability, he said.
ICRA’s Jayanta Roy said global inventory of aluminium has been declining and even without the war, aluminium is estimated to be in deficit in calendar 2022 because of production cut in China. “Russia being a large supplier of aluminium, contributing around 12% of international trade, any sanction imposed on Russian aluminium exports would further affect the demand-supply position in the rest of the world,” he said.
Latest Sports News | Latest Business News
( News Source :Except for the headline, this story has not been edited by Rashtra News staff and is published from a www.financialexpress.com feed.)
Related searches :