Indian primary aluminium producers may see pressure on profits due to falling metals prices: Nalco

Falling global prices of alumina and primary aluminium are likely to put pressure on Indian primary aluminium producers, in terms of profits, warned Tapan Kumar Chand, Nalco’s chairman & MD at the company’s 38th annual general meeting on September 18, 2019.

At present, the LME’s average price of aluminium is at $1,762 per tonne, down by about 14 per cent from $2,054 per tonne in the same period last year. The expected range in the entire financial year is likely to come in at $1,750 per tonne to $1,800 per tonne, said Chand at the meeting.

Besides, he also pointed out that the threat of increasing aluminium import into India persists, while reminding that in FY2019 India’s aluminium import had accounted for 58.9 per cent of the total consumption. Support from the government in countering this can help domestic producers to safeguard their market share and profitability, said Chand.

However, with the belief that the demand for aluminium will remain strong, driven by the usual high consuming sectors like automobile, construction, and power, Nalco has decided to go ahead with its investment plans, stated the annual report.

The central government-owned entity will invest INR 5,540 crore to expand its alumina refinery capacity. Sourcing of bauxite for this expansion is to come from the Pottangi mines in Odisha’s Koraput district and from the south block of Panchpatmali mines in the same district, for which capital expenditure of INR 483 crore has been projected, according to the report.