YS Sujana Chowdary Updates from Rajya Sabha. Questions Debates and Current News
Monday, March 19, 2012
Sharp Drop Of Aluminium Prices
GOVERNMENT OF INDIA
MINISTRY OF MINES
UNSTARRED QUESTION NO-548
ANSWERED ON-19.03.2012
(a) whether it is a fact that sharp drop in London Metal Exchange (LME) aluminium prices has made it unviable for several producers to shut down their smelters across the country; (b) if so, the details thereof; (c) whether rising coal prices have also exaggerated the problems of aluminium producers, which would further hamper the economic growth of the country; and (d) the steps taken/being taken by the Government in this regard?
ANSWER
THE MINISTER OF STATE (INDEPENDENT CHARGE) FOR MINES (SHRI DINSHA PATEL)
(a): As per information received from the primary aluminium producers in the country viz National Aluminium Company Limited(NALCO), HINDALCO Industries and the Vedanta Group, the prices of aluminium at the London Metal Exchange (LME) have fluctuated substantially during the current financial year i.e 2011-12 and there has been considerable volatility in the market as well. The LME prices of aluminium has declined from a high of US $ 2,663 per tonne in April,2011(monthly average) to US $ 2,021 per tonne in December,2011 and marginally improved to US$ 2,204 in February, 2012. In view of prices of other raw materials having increased significantly during this period, the profitability of the primary aluminium producers has gone down considerably. However, none of them have closed their smelters in the past one year.
(b): Does not arise.
(c): The aluminium smelter is highly power intensive. Cost of production of aluminium has increased of late due to increase in input costs, particularly power, which accounts for nearly one third of the cost of metal production. The constraints in availability of indigenous coal and substantial increase in coal cost in the current financial year has adversely affected the margins of the primary aluminium producers in the country, compelling some of them to curtail their metal production.
(d): The LME prices of aluminium are market driven and guided by several global factors. The Government reviews from time to time the rates of various duties including import duty on raw materials required for production of aluminium, allocation of coal blocks and/or linkage coal to the extent possible, with the objective of reducing the overall operating cost of primary aluminium producers.
(a) whether it is a fact that sharp drop in London Metal Exchange (LME) aluminium prices has made it unviable for several producers to shut down their smelters across the country; (b) if so, the details thereof; (c) whether rising coal prices have also exaggerated the problems of aluminium producers, which would further hamper the economic growth of the country; and (d) the steps taken/being taken by the Government in this regard?
ANSWER
THE MINISTER OF STATE (INDEPENDENT CHARGE) FOR MINES (SHRI DINSHA PATEL)
(a): As per information received from the primary aluminium producers in the country viz National Aluminium Company Limited(NALCO), HINDALCO Industries and the Vedanta Group, the prices of aluminium at the London Metal Exchange (LME) have fluctuated substantially during the current financial year i.e 2011-12 and there has been considerable volatility in the market as well. The LME prices of aluminium has declined from a high of US $ 2,663 per tonne in April,2011(monthly average) to US $ 2,021 per tonne in December,2011 and marginally improved to US$ 2,204 in February, 2012. In view of prices of other raw materials having increased significantly during this period, the profitability of the primary aluminium producers has gone down considerably. However, none of them have closed their smelters in the past one year.
(b): Does not arise.
(c): The aluminium smelter is highly power intensive. Cost of production of aluminium has increased of late due to increase in input costs, particularly power, which accounts for nearly one third of the cost of metal production. The constraints in availability of indigenous coal and substantial increase in coal cost in the current financial year has adversely affected the margins of the primary aluminium producers in the country, compelling some of them to curtail their metal production.
(d): The LME prices of aluminium are market driven and guided by several global factors. The Government reviews from time to time the rates of various duties including import duty on raw materials required for production of aluminium, allocation of coal blocks and/or linkage coal to the extent possible, with the objective of reducing the overall operating cost of primary aluminium producers.
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