NALCO is charging premium Aluminum Price to cope with losses

In the last couple of months, NALCO has been charging a more than $150 per ton premium on its export tenders. Bagra felt that prices would swing between the $2,100 and $2,300 mark until the end of 2012.

Reuters had reported on May 11 that NALCO had sold 12,000 metric tons of aluminum ingots at a $160 per ton premium over the average LME cash price on a CIF basis. Ansuman Das, NALCO commercial director, had been quoted by the news agency that the company would be shipping the consignment to a London-based buyer in six batches from May to October.

In April, too, NALCO had sold a similar quantity of aluminum ingots at a $152 per ton premium over the average LME cash price on a cost, insurance and freight basis to a South Korean buyer.

NALCO had also last week raised aluminum prices by Rs 4,000 per ton across all products in the domestic market, taking it to Rs 142,700 per ton, to be more in sync with LME prices. This came alongside news of the company reporting a decline of 7.6 percent in its net profit at approximately $56 million for the quarter ended March 31, 2012, largely due to higher fuel costs and lower aluminum sales. The aluminum major had reported a net profit of approx $63 million during the corresponding period last year.

The company’s realizations on aluminum sales were down by about 11.5 percent during the quarter, largely due to lower prices on the LME, even as its power and fuel expenses rose by over 4 percent in the reported quarter.