Aluminium output rises 5.6%

Primary aluminium production in Asia, including India, has grown by 5.6 per cent to 301,000 tonnes in April 2007 compared with 285,000 tonnes a year earlier, according to the International Aluminium Institute (IAI).

However, rising aluminium production levels in Asia and across the globe, have led several foreign brokerage houses to downgrade their price forecast for aluminium to $2,340 a tonne in FY08 compared to the current spot prices of $2,850 a tonne on the London Metal Exchange.

Domestic aluminium prices move in tandem with LME prices and any downtrend in this non-ferrous metal in the latter half of CY07 could hit players like National Aluminium Company and Hindalco. Meanwhile, the total global aluminium production amounted to 10.03 million tonnes between January and April 2007 compared with 9.78 million tonnes a year earlier. The average aluminium price was up 12 per cent year-on-year to $2,746 a tonne in the March 2007 quarter. Nevertheless, Hindalco's operating profit margin declined 330 basis points y-o-y to 22.1 per cent in the last quarter.