Hindalco reduces prices by Rs 8000

Seeing the cascading effect of global downtrend in commodities, aluminium major Hindalco Industries slashed prices of its basic products by Rs 8,000 a tonne across all categories today, thus wiping out the gains it had made in May.

"This price cut is in line with the LME (London Metal Exchange) slash in aluminium prices, which have declined sharply in the last one month," a company source said.

The spot price of the metal declined by $558 a tonne on the LME in the last one month to settle at $2413.5 a tonne on Tuesday compared with $2971.5 a tonne on May 17, when Hindalco and Nalco had last raised prices by Rs 10,000 a tonne.

Aluminium inventory remained range-bound with marginal decline of 1,775 tonne on the LME.

Earlier, domestic aluminium producers were about to raise prices further, but the sudden change in trade sentiment or the cooling off hit them hard with little opportunity for traders to square off their profitable positions.

The price of aluminium ingot fell in Mumbai non-ferrous metals market by Rs 16 to close at Rs 134 a kg today vis-a-vis Rs 150 on May 17, while utensil scrap ended the day down at Rs 99 a kg, compared with Rs 112.

Another public sector aluminium major, Nalco, usually follows Hindalco, but so far it has not revised its product prices downwards. However, analysts believe it is inevitable "� the company would slash its basic selling prices soon.

"We are closely looking at the aluminium price movement on the LME as well as steps taken by other domestic players. And, we would take a decision very soon," a Nalco official said.

Aluminium June futures on Multi Commodity Exchange of India (MCX) slipped to Rs 110 a kg on Tuesday from Rs 140.35 a kg on May 17. Aluminium ingot strengthened a little after its launch on May 22 at Rs 126 a kg but closed at Rs 124 on Tuesday, losing Rs 2.

Ukraine's announcement of higher alumina output, today, may also contribute a bit to the overall downtrend. It announced an increase of a meagre 3.3 per cent in its alumina output in January-May to 689,750 tonne, and only 1.2 per cent in primary aluminium output to 47,420 tonne.

Ukraine's largest alumina producer "� the Russian Aluminum-controlled Nikolaev alumina plant "� produced 5,81,400 tonne of alumina in January-May, 4.2 per cent more than a year ago.