State-owned National Aluminium Company (Nalco) expects tocontinue to rake in a premium over benchmark London Metal Exchange (LME) prices of aluminium by catering to demand from deficit regions.
“We have contracted to sell a batch of up to 8,000 tonne of alumunium in Europe till February at a premium of $203 per tonne over the average LME price,” said a senior company official, seeking anonymity.
Average LME cash price of aluminium is around $1,900 per tonne on cost, insurance and freight basis.
Analysts, too, see the premium continuing.
“Nalco has been taking benefit of regional mismatches quite efficiently and hence is enjoying very strong creditors’ market premium,” said an analyst. Though concerns remained on the diversification front, with its expansion complete, Nalco can clock good numbers.
The Nalco official said Europe is a strong market for the company, where it can get premiums of even $210 per tonne over LME prices.
This is a marked shift from the premiums it was clocking when it sold some batches to an Australian buyer in July and a Hong Kong buyer in September last year at $150 per tonne and $102 per tonne, respectively.
“Our expansion is complete and we are running at a rate of over 20 lakh tonne per annum from just over 15 lakh tonne per annum. Most of the additional capacity will be sold in the international market,” he said.
According to news agencies, Nalco, whose tenders serve as a global benchmark, last sold 4,500 tonne of aluminium ingots at about $180 per tonne premium over the average LME cash price on a CIF basis to a European buyer last month.
“Supplies from Australia are not uniform currently and hence Nalco is at an advantageous position,” the analyst said.
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