Aluminium stocks shoot up as product prices rise

Mumbai, Jan 2 | Updated: Jan 3 2006, 07:33am hrs
The news of aluminuim price hike by countrys two largest producers Hindalco Ltd and state-owned National Aluminium Company (Nalco) acted as a trigger for all the aluminium stocks on Monday.

Hindalco increased prices by Rs 4,000 rupees ($89) a tonne, or 3.7%, to Rs 112,000 rupees a tonne, Nalco raised prices by Rs 3,500 a ton to Rs 112,000 rupees a tonne.

On Monday, among the front-line stocks, Nalco gained nearly 3% to end the day at 226.20. Hindalco Industries also gained nearly 2% on Monday to close at Rs 146.05. This is the fifth time during the last four months that the Nalco has increased the prices owing to the rising international prices.

The average rate of various grades of aluminium has been raised to nearly Rs 1.1 lakh per tonne. Interestingly, in the past whenever Nalco raised the prices, it was always attributed to a corresponding hike in the metal price in China.

On the Bombay Stock Exchange (BSE), the BSE Metal index gained 50.37 points or 0.78% to end the day at 6,535.56. On the other hand, the benchmark Sensex lost a marginal 7.79 points on Monday to settle at 9,390.14.

In fact, the metal index has gained nearly 5% or 296 points in the last one week, compared to the 3.35% rise of the Sensex. Jigar Mistry, research analyst, Prabhudas Lilladher, said, The increase in domestic prices reflect buoyant international prices on London Metal Exchange (LME), which stands at $2,285 a tonne. This increase is a result of two factors - increasing demand and shortage of smelters.