Aluminium stocks have following declining metal prices. Aditya Birla group company Hindalco ended the day today on the Bombay Stock Exchange (BSE) at Rs 485.50, down 31 per cent from the level of July 2002. National Aluminium or NALCO, despite rumours of imminent privatisation, has lost 8.33 per cent since July 2002. Today NALCO ended the day at Rs 90.75.
Madras Aluminium has shed 28.82 per cent from July and closed today at Rs 50. Only Indian Aluminium or INDAL has risen since July 2002, gaining 21.92 per cent since July to touch Rs 119 today.
Globally prices of the metal has been falling due to excess supplies flooding the market and a slowdown in the economic activity, discouraging acceleration of aluminium prices. Indian aluminum prices are directly affected by global prices and are closely watched by Indian players.
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A year ago, the price of aluminum was 62.8 cents a pound, and in 2000, it hovered around 70 cents a pound for the year. At current rates, it is becoming very difficult for companies to sell the metal at a profit.
Right now China is holding back from selling as it wants to sell at minimum $1400 a tonne, says an analyst and this too is pushing prices higher. Back home, from a strategic perspective, it appears that the aluminium majors perceive that aluminium is likely to remain a volume game in the foreseeable future.
Sluggish global demand and excess capacity were likely to keep aluminium prices under pressure in the near-term.