Indian primary aluminium producer Nalco is keen to sign-up long term alumina contracts with its major buyers as prices of alumina stabilises in the global markets. Last fiscal, Nalco took advantage of the uptick in global alumina prices and sold around 95pc of its exportable alumina output in the spot market.
Global alumina prices zoomed up after the US imposed sanctions on Rusal, which is the world’s second-largest producer of aluminium. Alumina was bullish in the international market in 2018 and prices surged to around $600/mt. However, the prices dropped after the US lifted on Rusal and Alunorte’s Brazil-based refinery resumed normal production. Nalco incurred Rs280mn loss in the second quarter as spot rates for alumina dropped to around $350/mt.
With the changed market conditions, Nalco is keen to switch back to its alumina sales strategy of long term contracts in international markets. The policy change needs to be approved by Nalco’s board of directors.