Mineweb reported that Vedanta Resources said has sold 3,000 tonnes of aluminium ingots at a premium of USD 220 per tonne over the London Metal Exchange price in the Asian market.
National Aluminium Company has also sold 8,000 tonnes of aluminium ingots at a premium of USD 202.80 per tonne premium over the LME price.
Earlier this month, the company had sold 4,500 tonne of aluminium ingots at about USD 180 per tonne premium over the average LME cash price. Buyers tend to pay a premium in addition to the LME cash price to cover freight and insurance and to reflect regional supply and demand.
Novelis Inc, the world's leading producer of premium aluminium rolled products, signed an agreement with the Changzhou National Hi Tech District to build the company's first automotive sheet manufacturing facility in China. With a capacity of 120,000 tonnes per year, the plant will cater to the rapidly expanding Chinese automobile industry. Novelis expects demand for aluminium in the global automotive sector to grow at a compound annual rate of 25% over the next five years.
In 2007, Novelis was acquired by Hindalco Industries and became part of the Aditya Birla Group in India. The latter already has announced investments of USD 1.3 billion to set up new facilities and expand the capacity of existing units.
The Novelis deal in China is especially significant since the top 5 alumina producers in China, including Aluminium Corporation of China said that they would cut production by 10% from June due to the changes in the supply of bauxite imports.
Chalco has an alumina capacity of 14 million tonnes a year, making it the country's top producer of the material used for the production of primary aluminium. Chalco is to cut alumina capacity by 1.7 million tonnes because the change in Indonesia's bauxite policy has affected the supply of imported bauxite for the company, Shandong Nanshan Group, Nanchuan Minerals Group, Xinfa Group and Gaoxin Aluminium and Power Companu which has been the sole alumina supplier since January 2010 to aluminium producer China Hongqiao Group have all decided to cut output.
Analysts said that aluminium smelters in China's Xinjiang province, which is aiming to become a key production hub of the metal have been hobbled by costly power rates and are set to add only about a third to half of the capacity expansion originally planned for 2012.
Vedanta Resources has said the increase in premiums over the LME was an outcome of global tightness in the physical market due to closure of smelters in recent quarters in the wake of low LME prices. Tluminium premiums were also increasing because of highly profitable financing deals and business consumers have to compete with warehouses to get hold of metal from producers.'
Source - Mine Web
(www.steelguru.com)
