Nalco to Sell More Alumina in Spot Market as Prices Increase

Sept. 23 (Bloomberg) -- National Aluminium Co., India’s second-biggest producer, plans to increase sales of alumina in the immediate delivery market by 20 percent next year as prices strengthen on Chinese demand. Spot-market sales of the aluminum-making raw material will probably increase to 360,000 metric tons from 300,000 tons this year, Chairman C.R. Pradhan said in an interview from the eastern city of Bhubaneswar, where the company is based. Alumina prices in Europe, a benchmark, rose 72 percent since April, according to U.K.-based Metal Bulletin. Demand for aluminum, used in cars, aircraft and construction, is rising in China as the government implements a $586 billion stimulus package to lift the economy out of the deepest global recession since World War II. Passenger car sales almost doubled last month, bringing the nation closer to overtaking the U.S. as the world’s largest auto market. “China’s demand has pushed up prices,” Pradhan said yesterday. “Prices will stabilize at the current level.” Nalco, as the company is known sold alumina in the spot market at $283.70 a ton in August, compared with $191.13 in February. Nalco shares fell as much as 4 percent to 350.15 rupees in Mumbai and traded at 358.40 rupees as of 11:50 a.m. local time. The shares have almost doubled this year, compared with a 75 percent gain in the key Sensitive Index. Alcoa’s Forecast Alcoa Inc., the largest U.S. aluminum producer, raised its 2009 forecast for global aluminum consumption because of demand triggered by China’s stimulus spending. China’s consumption of the lightweight metal is expected to rise 4 percent this year, compared with Alcoa’s previous prediction of zero growth, Chief Executive Officer Klaus Kleinfeld said earlier this month. Aluminum Corp. of China Ltd., the nation’s largest producer, raised alumina spot sales prices for the second month in September as demand recovered. Prices will rise 6.3 percent to 2,550 yuan ($373) a metric ton, the Beijing-based company, known as Chalco, said on Sept. 1 Chalco on Aug. 3 raised prices by 4.3 percent, the first gain since April 1. Aluminum for three month delivery on the London Metal Exchange has rebounded 50 percent this year after falling almost 50 percent in 2008. Alumina prices have gained 36 percent this year, according to data from researcher Metal Bulletin. Nalco plans to sell 240,000 tons of alumina through long-term contracts next year and will call for bids in October, Pradhan said. The company sold 300,000 tons of alumina last year.