Firm aluminium prices on the London Metal Exchange
(LME) are prompting the recovery of leading aluminium
scrips such as Hindalco and Nalco in the stock exchanges.
January to March 2003, aluminium prices on the LME have
jumped by $66, moving from $1,270 per tonne to $1,336
per tonne. Prior to that, LME prices had gained very low
grounds. However, after 7 October 2002 onwards, aluminium
prices on the LME have climbed steadily from a low of
$1,195 per tonne.
Since 1 April,
the prices of Hindalco has moved up from Rs 530 to Rs
625 per share, touching a 52-week high on Wednesday. However,
Nalco stocks continued to drift downwards, due to the
uncertainty over the disinvestment process. It has shed
slightly from Rs 93 on 1 January to Rs 87 on 23 April
"Now the aluminium
prices on the LME are hovering around $1,336 per tonne,
marking a 7-8 per cent price gain in the last few months,"
says Nikhil Thakker of Sushil Finance, a market research
firm. The Hindalco stock, the leader in the category,
has gained around Rs 150 since 28 October 2002 and closed
at Rs 625 on the Bombay Stock Exchange (BSE) on Thursday.
scrips like Indal, Madras Aluminium and Man Industries
also gained on the BSE and the National Stock Exchange.
Indal gained over 4 per cent during the three-month period
and closed at Rs 120 as against Rs 115 on 1 January 2003.
and Man Industries too have rallied in the positive territory
over the three-month period. Dealers say mutual funds
and institutions are actively trading in Hindalco and
Nalco. Hindalco has gained mostly from the firm global
Analysts with SBI
Capital Markets say there has been an artificial reduction
in supply of the white metal, prompting global prices
to rise. Manufacturers are believed to be stockpiling
aluminium, and inventories are believed to have doubled
compared to that at the same time in 2002.
4 November 2002, aluminium stocks amounted to 12.97 lakh
tonnes, as compared to 6.96 lakh tonnes in 2001. However,
aluminium prices are expected to drop once these inventories
find their way into the global market.