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UPDATE: Global Aluminum Prices May Rise On Yuan Move - NALCO Executive

iconJun 23, 2010 08:58
Source:SMM

NEW DELHI, June 23 -- National Aluminum Co. (532234.BY) expects global aluminum prices to marginally increase in the near term following Beijing's announcement over the weekend to ease the yuan's peg to the dollar.

Exports from China of alumina, the semi-processed aluminum ore, could also become uncompetitive because production costs would rise as the yuan will likely appreciate against major global currencies, NALCO Finance Director B.L. Bagra told CNBC TV18 Tuesday.

NALCO, India's second-largest aluminum producer by output, is a key exporter of alumina worldwide and stands to benefit from any price increases of the white metal.

"We are watching very carefully as to what really happens on the ground. Nevertheless, there is an optimism about the decision (from China on the yuan)," Bagra said.

Monday, aluminum cash prices on the London Metal Exchange closed at $1,968 per metric ton.

Bagra said global aluminum prices are likely to quote above $2,000 a ton in the near term after slipping in the last two months.

"The drop in prices (of aluminum) in the last two months has been more due to the European economic crisis than any fundamental reasons," said Bagra, adding that he expects the metal's global price to remain between $2,000-$2,200 a ton in the next six months.

Separately, Bagra said the company doesn't need to raise either debt or equity as the cash-rich company has INR40 billion in cash reserves.

"It will be enough for our capital expenditure requirements for another two financial years," Bagra said.

The company plans to spend INR13 billion as capital expenditure in the fiscal year through March 2011, mainly to add production capacity at its existing plants.


 

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NALCO

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