Aluminium prices may rise by up to 10 per cent in 2-3 months to $ 2,000 per tonne due to subdued supply in the international market, Nalco Chairman B L Bagra said on Friday.
“The price of aluminium should recover from the present level of $1,850 a tonne. In the next 2-3 months, it should cross $ 2,000 per tonne,” Mr. Bagra told PTI on the sidelines of a conference here.
Aluminium prices have remained subdued so far in this fiscal because of poor demand from all across the user sectors like transport, packaging and construction, which account for nearly 70 per cent of the global 42 million tonne consumption of the metal.
Condensed margins have forced a lot of aluminium capacity to put on hold as the price of the metal is on the wane while the raw material costs are on the rise, Mr. Bagra said.
“We were hoping the price of aluminium should average between $ 2,100—2,200 per tonne in the current fiscal. But it is no where near there. For the last four months, the price is below $ 2,000 a tonne.
“So, even to arrive at the targeted price, the price should be $ 2,300—2,400 for the rest of the period, which I don’t foresee going to happen,” he said.
Indian producers were so far able to offset the squeezed margin, partly by the depreciation of rupee, but the pressure is still there, Mr. Bagra said.
“The rupee has depreciated roughly by around 12 per cent, while the price of aluminium in the London Metal Exchange is down by more than 25 per cent. So, there is still drop in the realisation,” he added.
Aditya Birla Group’s flagship Hindalco is the largest domestic producer of aluminium, with about 40 per cent of the total 17.36 lakh tonne installed capacity. Sterlite has the second highest capacity and state—owned Nalco ranks third.
Mr. Bagra said, of late, Chinese and Australian governments are trying to support their companies with subsidies which are causing distortion in the international aluminium market.
