Nalco Sees Alumina Prices Remaining Below $200 a Ton

Jan. 14 (Bloomberg) -- National Aluminium Co., India’s biggest alumina producer, forecast prices of the main aluminum- making material this quarter will remain below $200 a ton, about half the average of last year, because of weakening demand. Alumina in the “near term” will trade between $180 and $200 a ton, Chairman C.R. Pradhan said today in an interview from Bhubaneswar, where National Aluminium is based. The average price last year was $374 a ton. The worst financial crisis since the Great Depression has curbed lending and reduced consumer demand, prompting companies to lower output. Alcoa Inc., the world’s largest aluminum maker, announced on Jan. 6 its third production cut in as many months because of falling prices and declining demand from automakers, builders and appliance manufacturers. “These production cuts may help stabilize prices,” Pradhan said. Aluminum prices are near five-year lows. Shares of Nalco, as National Aluminum is known, fell as much as 3.8 percent to 177.1 rupees and traded at 182.8 rupees, down 0.7 percent, at 2:01 p.m. in Mumbai. Nalco got bids of $194.11 a ton for the alumina it sold in the immediate delivery market this month, 6 percent lower than last year, Pradhan said. Alumina traded at $225 a ton in the spot market as on Jan. 9, according to Metal Bulletin. No Expansion Alumina Ltd., partner in the world’s biggest producer of the material, may not reconsider expanding its Wagerup refinery in Western Australia for two years because of declining demand, Chief Financial Officer Ken Dean said today. Rio Tinto, the world’s second-largest aluminum maker, announced last month it would slow or halt investments as the metal fell 36 percent last year on the London Metal Exchange. Alumina prices declined almost 38 percent in the same period, according to the U.K.’s Metal Bulletin Plc. Nalco exports 64 percent of its 1.6 million tons of output at prices linked to the London Metal Exchange. Alumina is priced at $225 a ton in the European Union, according to the bulletin. Aluminum for three-month delivery traded at $1,525 a ton as of 5:36 a.m. local time on the LME. Prices have declined more than 12 percent since Dec. 1. Aluminum is smelted from alumina, a semi-processed material made from bauxite ore.