Hindalco, Nalco cut aluminium prices

Hindalco Industries and National Aluminium Co., India's biggest producers of aluminum, cut prices for the seventh time this year after the metal dropped in London and a stronger currency made imports cheaper. National Aluminium, or Nalco, cut prices by Rs 2,500 ($63), or 2.1 per cent, to Rs 113,000 a tonne, Chairman C R Pradhan said by phone from New Delhi. Hindalco lowered rates by Rs 3,000 a ton, spokeswoman Pragnya Ram said in Mumbai.

Prices of aluminum have declined 9 per cent in the past six months on the London Metal Exchange, a benchmark for producers in India. Companies may struggle to raise prices in the coming months as a strengthening rupee allows users such as packaging companies, power utilities and carmakers to purchase the metal cheaper from overseas.

"It is a double-whammy with prices falling in London and the currency appreciating,'' said Niraj Shah, an analyst with Prabhudas Lilladher, a stockbrokerage in Mumbai. "Even if prices stabilize, companies may not gain as it seems the rupee will continue to trade strong.'' Aluminum traded at $2,515, down $5, or 0.2 per cent a tonne on the London Metal Exchange at 11:30 a.m. in Mumbai.

The rupee rose the most last month since April on optimism the nation's economic growth and rallying stock market will lure more overseas funds.