Aluminium price rebound is here to stay, says NALCO CMD

Aluminium is currently moving in the range of USD 1,620-1,650 per tonne range. In the first quarter of the current fiscal, aluminium price was average around USD 1,514 per tonne. In the second quarter, it climbed up to USD 1,576 per tonne average during that quarter. Right now in July, last 12 days, average is moving out to USD 1,623 per tonne. So, there is a little forming of the price of London Metal Exchange (LME) during this time.

While talking about the current aluminium and alumina price scenario in an recent interview with a leading television channel, TK Chand, CMD of Nalco, said, this price movement is mainly because in second quarter, the consumption of aluminium metal was around 15.39 million tonnes and production was around 14.58 million tonnes, leaving a deficit of 0.8 million tonnes and that had a lot of the effect for picking up of price in aluminium.

“At the same time there has been reported picking up in auto sector which is also helping in firming of the price,” Chand said. “But, if we compare, last year, price and this year’s price, we find that in 2014, the average LME price during that year was USD 1,880 per tonne, whereas in 2015 it climbed down to USD 1,663 per tonne and in 2016 till June, it is USD 1,543.”

“That means it is a downward trend as far as the price is concerned year-on-year (Y-o-Y) and that is the situation as far as aluminium price still continues to be subdued, but a silver lining is there. It is starting to firm up; but in Q3, there is likelihood of production around 15.08 million tonnes on consumption at the same level.”

So, this deficit which is there in Q2 may not be there in Q3, Chand pointed out. "There is some apprehension that the prices may again start softening," he said.

Speculations regarding China restarting some of its closed smelters further support his outlook for the metal used in aircraft to buildings.

According to other industry experts, as far as the outlook for the quarters is concerned, even if the aluminium prices do not firm up much, they will not slide down from the level where they are now. Prices, in all likelihood, will be somewhere around USD 1,560-1,600 per tonne, analysts opined.

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