Stopped spot sales of alumina: Nalco

Nalco has hiked aluminium prices by Rs 4000 per tonne and has done away with some discounts too. But numbers for the quarter gone by may not be great due to low alumina and aluminium prices during the period.

However, Nalco CMD CR Pradhan says that financial performance in Q2 will be equivalent to Q1.

Speaking on the price increase, Pradhan says that the effective increase for aluminium is Rs 5,700 per tonne. Long-term alumina contracts are at 11.33% of LME prices, he says.

He further says that they have stopped spot sales of alumina.

Excerpts from CNBC-TV18's exclusive interview with C R Pradhan:

Q: The outlook looks good because you hiked prices on October 3. What kind of performance did we see in the previous quarter? How have the prices been through that quarter?

A: All these prices have been fluctuating over a period. The financial performance will be better. There is nothing to be worried about as far as financial performance for Q2 is concerned. It will be equivalent to Q1.

Q: Where are aluminium and alumina prices at this point?

A: We have increased aluminium prices by Rs 4,000 and some discount has been taken out. So the effective increase will be around Rs 5700 or so. And the LME prices are quite strong, it settles around USD 2,590 a tonne.

The alumina prices are expected to be low. We have stopped giving spot sale. Otherwise, the long-term contract, is going quite well; there is nothing to be worried.

Q: At what price are you locking your long-term contracts for alumina, in specific for now?

A: We have already finalised the long-term contract, one and a half months ago. It is at 11.33% of LME and it will be equivalent to USD 300.

Q: What is the outlook for aluminium prices?

A: If one looks at last one-week's trend, it has been going up. Our prediction is that it may touch a very high level.

Q: Will it touch USD 3000 per tonne by the end of year?

A: Yes, that is the prediction.

Q: Do you think that is likely?

A: That is likely because the rate is going up and it is likely to touch USD 3,000.

Q: What is the year-end target for alumina? What sort of realisations, will you see in both aluminium and alumina?

A: The average for aluminium will be USD 2,400 or so. And we have a long-term and a short-term mix and we have an average realisation of USD 370 for alumina.