National Aluminium to Boost Output as Demand Revives

April 1 (Bloomberg) -- National Aluminium Co., India’s second-biggest producer, said it plans to boost metal production by about a fifth this fiscal year as it increases its smelter capacity to prepare for a revival in demand. Aluminum production may rise to almost 435,000 metric tons in the year ending March 31 from about 360,000 tons a year ago, Chairman C.R. Pradhan said today. Alumina output may increase to 1.86 million tons from an estimated 1.62 million tons. Orders for the metal are picking up in India after the government approved 700 billion rupees ($14 billion) of projects since August to build roads, ports and highways. Aluminum prices slumped 53 percent in the past year on the London Metal Exchange. “The demand is pretty good in India and we expect it to remain so in the future,” Pradhan said in a telephone interview from Bhubaneswar, where the company is based. “The volatility in price is keeping overseas buyers out.” National Aluminium shares today rose for the first time in three days, erasing earlier losses. They gained 0.9 percent to 216.65 rupees at the 3:30 p.m. close of trading in Mumbai. The key Sensitive Index rose 2 percent. Price Forecast Primary metal prices are expected to average $1,800 a ton and alumina about $230 a ton this fiscal year, Pradhan said. Aluminum for three-month delivery fell as much as 1.1 percent to $1,377 a ton today, the lowest since March 18. The state-run company expects sales of 51.2 billion rupees this fiscal year, compared with an estimated 50 billion rupees to 55 billion rupees last year, Pradhan said. The targets are part of a mandatory performance commitment the company made to the federal ministry of mines yesterday, he said. National Aluminium plans to export 30 percent of its aluminum output and 60 percent of its alumina production this year, he said. The company sells most of its aluminum locally at prices linked to the London Metal Exchange, while alumina is sold through a combination of long-term and spot tenders. The company is expanding its aluminum smelting capacity to 460,000 tons at Angul in eastern Orissa state, while alumina capacity is being lifted to 2.1 million tons. Aluminum is smelted from alumina, a semi-processed material made from bauxite ore.