National Aluminum Company Limited after posting good numbers in the Q1 is training its guns on the export market to maximize profits.

The public sector aluminum producer which started phase wise commissioning of the expanded alumina refinery in Orissa in the last quarter will see an additional alumina production of close to 60,000 tonne in the Q2.

A top company official said that although it was commissioned in the last quarter, the impact will be seen in the second quarter figures as the production has started now. We expect decent benefits to reflect in the current quarter’s numbers.

He said that the company will export the entire additional production, as it does not require any additional alumina for the aluminum smelter at Angul. We are optimistic on the price trends and demand of alumina globally and hence we will continue to focus on the export markets.

The company plans to produce an additional alumina of 0.3 million tonnes to 0.35 million tonne in the current fiscal. Nalco at present exports close to 0.6 million tonne out of a total production of 1.575million tonne annually.

It is currently under process of expansion of the alumina refinery from 1.575 million tonne per annum to 2.275 million tonne per annum. The capacity will first be expanded to 2.1 million tonne which is already under implementation and is slated to be completely ready by the current fiscal end. With a few technology augmentations it will be further expanded to 2.275 million tonne by the next fiscal.

Alumina, whose price is often calculated as close to 15% of London Metal Exchange aluminum price has seen a downward correction in its price due to falling aluminum price globally. The price of aluminum has fallen to USD 2,300 per tonne down from USD 2,600 per tonne a month back. But it is a temporary phenomenon and the outlook is bright. Besides, the company source said, volume growth will act as a driver in offsetting the impact of falling LME prices.

Mr Bikash Bhalotia analyst with brokerage Pinc Research said that “Operating cost pressure continues with alumina cost of production rising 23% YoY to USD 252 per tonne captive power generation cost up 37% YoY to INR 2.25 per unit and aluminum production cost up 22% YoY to USD 1,975 per tonne. The hike in cost was mainly due to higher raw material and staff cost which increased 155% YoY on further provisioning for wage revision.”

He said that while the cost of aluminium has come down due to turmoil in the US and Europe going forward the price could rise. However, we believe that decline is limited from current levels as prices would be supported by rising cost.’