The National Aluminium Company or Nalco expects to produce aluminium to the tune of 3.5 lakh tonne in the current financial year, somewhat exceeding its guidance of 3-3.2 lakh tonnes.
Speaking to CNBC-TV18 Ansuman Das, CMD, Nalco says the after signing the FSA with Coal India, it has secured supply of coal till 2018.
Nalco had earlier cut its aluminium production by 25 percent a couple of months back due to lack of coal availability. Das confirmed that the company will continue to keep its production at the current levels and have no plans for any further production cut.
Below is the verbatim transcript of Ansuman Das' interview on CNBC-TV18.
Q: Could you talk about the production cut that you have undertaken of 25 percent? Are there any further production cuts that the management will have to undertake because of the lack of coal availability?
A: The production cut which was done a couple of months back was primarily because of curtailment of coal supply by the Mahanadi Coalfields due to some accident. However, at present we will continue to keep our production at the current levels and we have no plans for any further production cut.
Q: How is the supply of coal especially from Coal India? How much of your requirements are being met?
A: The supply from Coal India has improved. In last quarter we used about 90 percent of coal which was supplied by Coal India through linkage. Incidentally, we have also finalised our fuel supply agreement for the next five years and so to that extent, Nalco got its coal supply secured till 2018.
Coal India has agreed to give 4.8 million tonnes of coal to the captive power plant at Angul and close to about 0.9 million tonne of coal for our regeneration plant at Damanjodi for production of alumina and both these arrangements will continue till 2018.
Q: You had earlier guided for an aluminium output of around 300,000 tonnes to 320,000 tonnes for FY14. Does that still stay?
A: That will stay. We will close down at a level of 350,000 tonnes or so.
Q: What is the price situation looking like? You had some advantages because of the rupee depreciation, could you push up prices or will you push up prices?
A: Nalco has been bearing its prices depending on the prices in the London Metal Exchange (LME) and keeping the imported landed cost at the parity. As far as Nalco's pricing is concerned, this system will continue to prevail and prices have been increased and decreased based on the imported parity prices.
With regards to LME prices, which is hovering in the range of about USD 1,750 to USD 1,800 and with a very short-term perspective, I do not see the prices moving beyond this but definitely there is some kind of resistance at USD 1,750 level.
Maybe in the end of the current fiscal we may have the prices moving in the range of USD 1,850 or so but we have to see how the Chinese economy improves, how Chinese manufacturing activities continue and whether the US economy would continue with the good figures.
