Global: Aluminum prices may rise to a 6-month high this quarter

Relevant media reported on January 11th: Vedanta Resources Plc (VED), India’s largest aluminum producer, recently stated that aluminum prices rose to a 6-month high at the end of the quarter as processing companies restocked to meet aluminum demand Rebound. Mukesh Kumar, chief operating officer of the company, said in an interview that as of March 31, 2012, the LME aluminum price may rise to $2,300/ton. The price of aluminum closed at $2164/ton on the previous trading day, and its price was higher than $2,300/ton in the most recent time on September 21, 2011.

It is reported that an increase in the manufacturing indices of China and India may stimulate sales of automobiles and consumer electronics in both countries, which will lead to higher demand for aluminum. In addition, aluminum prices will be driven by the global aluminum supply shortage in the first half of the year as aluminum smelters idle up to 15% of capacity due to the European sovereign debt crisis and measures taken by China to control inflation. Kumar said on the phone that processing companies will soon start purchasing aluminum, which will support aluminum prices. India's aluminum demand is likely to rise this quarter, as contractors of government projects are competing to finish their tasks this fiscal year.

It is understood that the shares of Hindalco Industries Ltd (HNDL), Sterlite Industries, and National Aluminum Co. all rose to varying degrees. The Indian government plans to double the investment in municipal engineering and public utility projects to US$1 trillion in five years (as of March 2017) and achieve economic growth of 9%. Indian Prime Minister Singh said on January 8 that in the fiscal year ending March 31, 2012, the country’s economy will grow by 7%, which is lower than the 7.5% forecast in December. Vedanta Group, which is composed of Vedanta Aluminum Ltd. and Streat Industrial Group, produced more than 637,000 tons of aluminum in fiscal year 2012, accounting for about 40% of India's total aluminum output. Vedanta Aluminum is unable to make a profit. The company is processing the rising alumina and electricity costs of its smelter with an annual capacity of 500,000 tons. The company plans to maintain production and expects aluminum prices to rebound during the quarter.