Alumina rates rise in China

Global spot alumina prices appear set for a rebound from their recent lows say analysts, as the Aluminum Corporation of China (Chalco), the leading player in that country, has raised the prices there by approximately 50 per cent to $462 a tonne.

Prior to Chalco's hike, the spot alumina prices were ruling at $230-240 per tonne in the global markets, point out analysts at foreign brokerage houses. Alumina typically accounts for 22-23 per cent of the cost of aluminium production.

Nalco is one of the largest exporters of alumina on a spot basis among domestic players and any recovery in the global prices is expected to help it get better realisation.

Spot alumina prices had hit $590 per tonne in April 2006 and later cooled off to $400 per tonne in August 2006. The prices then weakened to $230-240 per tonne levels, due to rising supplies.

However, the current uptick in China has been attributed to a sharp rise in aluminium production there over the last few months. For instance, according to the global industry body International Aluminium Institute, Chinese production of aluminium had jumped 27.2 per cent y-o-y in November 2006 to 8,66,000 tonne.

Earlier, the weakening trend in spot alumina prices had led to Nalco cutting its production by 6.3 per cent y-o-y to 3,82,200 tonne in the December 2006 quarter.