Due to higher import and e-auction coal prices, State-owned aluminium maker National Aluminium Company (Nalco) will be shutting down about 3-4% of its aluminium capacity over the next fortnight. The company, last year, had shut down 60 pots translating to about 7-8% of its capacity.
Aluminium requires huge quantities of power which is generated by burning coal. Nalco gets close to 90% of its coal requirements from state run Coal India. However, close to 12% of Nalco's coal requirement is fulfilled through import and e-auction process, which leads to higher production cost. So the company has decided to continue producing till coal from linkage is available without the help of the imported coal or the e-auctioned coal. The cost of power generation from these two sources comes to Rs 5.5 per unit which turns out to be unsustainable for the company.
The state-run company, recently raised aluminium prices by Rs 4,500 per tonne for all products in the domestic market, with effect from December 1, 2012. After this revision, the basic price of standard aluminium will be Rs 1,43,700 per tonne.
NALCO, which is India's third-largest producer of aluminium, revises product prices from time to time to mirror London Metal Exchange prices. It last raised aluminium prices across all products by Rs 2,500 in November.
