Company officials have informed that the explosion has rendered the plant unoperational for a year. The development comes as good news for lndian aluminium firms as international prices have already begun to harden. Indian companies have already increased prices and this could trigger a further price increase.

Analysts said that Hindalco's prices will go up further and is likely to boost its bottomline. Nalco, which exports alumina as well as aluminium ingots, will see a twin benefit and so will be the case of Indal.

Aluminium stock prices firmed up further on BSE and NSE on Thursday as news of the closure flowed in. Hindalco shot up to touch Rs 789 up from previous close of Rs 747 with volume surging to 3.6 lakh up from 3.3 lakhs on BSE in value terms of Rs 28.71crore.

On the NSE, Hindalco touched Rs 788 up from yesterday's close of Rs 742.20. Indian Aluminium inched up to close to Rs 74.65 from previous close of Rs 70.10. Nalco moved up from Rs 71.45 yesterday to close at Rs 74.80 on Thursday on the NSE, clocking 4.4 lakh shares in volume.

"Prices of spot Alumina in Asia are expected to rise if f.o.b prices for the spot Caribbean alumina surge on stronger demand from the US aluminium smelters, which are expected to seek additional spot alumina to cover unexpected supply deficits caused by explosion at Kaiser Aluminium", said Shailesh Merchant Brokers vice-president Chetan Shah.

According to Apple Financial Securities' AVP Malay Sameer, "if this happens, prices of spot alumina in the international market would rise in the near term. Strong prices in the US may also attract Australian alumina producers and western trading houses to increase the supply of spot alumina to the US market and reduce supply to Asia, which would further tighten supply in the Asianspot-alumina market." Another factor is that as China remains the largest spot buyer in Asia for Australian alumina, lower supply from Australia is likely to push up China prices for spot alumina.

A market participant informed that at 0930 GMT the three month LME Aluminum was quoted at $1,428-$1,431 per tonne compared to $1,294 on June 1. "In the international market the perceived demand was catching up with the supply. But with this development the huge inventory of Aluminium which was built worldwide will come down. Based on this, the prices should firm and rise further," said BSE broker Dilip Bhat.