NALCO head says alumina prices likely to rise

NEW DELHI - The head of India's National Aluminium Co. said on Monday global alumina prices were likely to rise over the next two to three months, and traders expected demand from China, India and others to push rates up.

"The exact range is very difficult to predict, but it is going to be better than the present one," NALCO chairman C.R. Pradhan told Reuters in an interview.

Alumina prices are ruling at between $260-$275 per tonne.

Pradhan added he expected the firm's alumina sales in the year to March to be flat at about 850,000 tonnes.

He said the company, one of very few to export spare alumina, was planning to sell roughly 30,000 tonnes of alumina in the spot market every month.

An international trader said the spot alumina market is picking up "as there is quite good demand out there from the Chinese, Iran, India and Europe."

"There is definitely tightness in the market. It has simply to do with the Chinese ... problems in the supply chain, issues on bauxite supply," he said.

Pradhan denied trade rumours the company had cancelled a long-term alumina sale tender with an international firm.

Output of aluminium this fiscal was seen at 350,000 tonnes.

Pradhan said the firm's net profit trend was rising and that he expected much better net profits this year.

"Globally the alumina industry is good, encouraging."

Last year, NALCO had net profits of 16.82 billion rupees ($380.5 million). He said third quarter net profit was going to be in the same range as second quarter -- 5.95 billion rupees.

EXPANSION EFFORTS

Pradhan said little headway had been made in finalising production facilities overseas, despite efforts to establish a unit in Dubai or Indonesia.

When asked about the prospects for setting up an aluminium smelter in the Gulf, he said: "They are saying you set up the plant but nobody is assuring us the gas. So under this situation we can't do it."

Plans for a plant in Indonesia had also stalled. NALCO was looking at building an aluminium plant with 350,000 tonne annual capacity, and a power unit capable of generating 1,300 MW.

Pradhan said the company's plans to secure mining leases from Orissa and Andhra Pradesh to set up greenfield smelters had also not made much progress.