Aluminium Stocks Fall as LME Prices Drop
By ThePip Desk
Indian aluminium stocks like Nalco and Hindalco slid Thursday as LME prices fell for a second day, easing global supply shortage concerns.
Aluminium stocks in India faced significant pressure on Thursday, driven by a second consecutive decline in London Metal Exchange (LME) aluminium prices. This downturn marked a pullback from recent two-month highs.
Top Movers in Aluminium Sector
- National Aluminium Company experienced the sharpest drop, falling 5.26%.
- Manaksia Aluminium saw a decrease of 1.88%.
- Hindalco Industries declined by 1.72%.
- Vedanta Aluminium closed 1.71% lower.
- In contrast, MMP Industries gained 1.92%, and Maan Aluminium rose 1.24%.
The overall weakness in the sector was attributed to an easing of concerns regarding a potential global supply shortage. This sentiment shift followed announcements signaling an earlier-than-expected recovery in production capacity.
Global Supply Concerns Ease
- Emirates Global Aluminium announced plans to restore production to “pre-war levels” by the first quarter of the following year, recovering from March’s Iranian strike disruptions.
- Australia’s Tomago smelter, with a capacity of 590,000 tonnes per year, secured a A$2.5 billion government bailout to ensure continued operation despite current losses.
Prior to this recent decline, aluminium prices had rallied for seven consecutive trading sessions. This surge was fueled by geopolitical tensions between Iran and the US, alongside concerns over the critical Strait of Hormuz export route.
On Thursday, LME aluminium prices settled 1.6% lower at $3,285.50 a tonne. This occurred even as inventories remained at their lowest levels since 1990, indicating underlying tightness despite the price correction.