NALCO expects alumina prices to be under pressure, while aluminium prices to ease in FY27

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National Aluminium Company is preparing for a mixed market environment in FY27, with alumina expected to remain under pressure even as aluminium prices continue trading at elevated levels for now.

Speaking in an interview with CNBC-TV18, NALCO Chairman and Managing Director Brijendra Pratap Singh said the company expects global alumina oversupply to keep prices subdued through the year.

According to Singh, alumina prices are expected to stay in the range of around USD 300 to USD 310 per tonne during FY27. Aluminium, meanwhile, is currently trading around USD 3,500 to USD 3,600 per tonne, though the company expects prices to eventually settle closer to USD 3,000 to USD 3,100 once geopolitical tensions ease and supply chains begin normalising again.

He noted that even if conditions improve globally, demand recovery for alumina may take time because restarting smelters is not immediate. Singh said the process could take six to seven months, meaning excess alumina in the market is unlikely to disappear quickly.

NALCO is also entering an important expansion phase. The company’s new one million tonne refinery is expected to begin commissioning around June, although Singh indicated production ramp-up would be slower than originally anticipated.

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Because the refinery is a chemical process plant, stabilisation will take several months. Instead of the earlier target of around 500,000 tonnes this year, the company is now expecting production closer to two to 300,000 tonnes in FY27 before reaching full capacity from the following financial year onward.

At present, roughly half of NALCO’s alumina output is exported. Last year, the company sold around 1.4 million tonnes externally, with approximately 40 to 45 per cent of exports going to the Middle East on average. However, Singh said NALCO now wants to increase its domestic presence as demand within India continues to grow.

Domestic alumina sales, which stood at about 138,000 tonnes last year, are being targeted at more than 200,000 tonnes, potentially reaching 2,50,000 tonnes this year.

On the cost side, the company is also dealing with rising input prices. Singh said caustic soda prices have increased from around INR 42,000 (USD 423.69) to INR 45,000 (USD 476.65) per tonne, while calcined petroleum coke prices have climbed to roughly INR 50,000-53,000 (USD 529.62 - USD 561.39) per tonne from an earlier average near INR 44,000 (USD 466.06). Coal tar pitch prices have also risen by around six to seven per cent.

According to the company, these increases could add around INR 5,000 (USD 52.96) to INR 6,000 (USD 63.55) per tonne to aluminium production costs and roughly INR 2,000 (USD 21.18) per tonne to alumina costs.

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NALCO is hoping higher captive coal production will offset part of that pressure. The company produced around four million tonnes of coal last year and is targeting 4.8 million tonnes in FY27, which would cover a major share of fuel requirements for its power operations.

Despite higher aluminium realisations, Singh acknowledged that EBITDA could soften slightly this year because of higher costs and depreciation linked to expansion projects.

NALCO reported Q4FY26 revenue of INR 50.13 billion, with margins of 46.8 per cent and net profit of INR 17.22 billion (USD 182.40 million). The company’s shares were trading around INR 399 (USD 4.23) on the NSE at the time of the interview, up around 158 per cent over the past year.

Singh also clarified during the CNBC interview that there are currently no plans for government disinvestment or an offer-for-sale in NALCO.

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