Explained: Why Vedanta Aluminium, Hindalco, Nalco shares tumbled up to 7% on Friday
Vedanta Aluminium, Hindalco and NALCO fell as aluminium prices retreated after Norsk Hydro resumed Alunorte refinery production, easing supply shortage concerns.
On Friday, Vedanta Aluminium, Hindalco, and National Aluminium Company (NALCO) shares plummeted up to 7% due to a decline in aluminium prices from a seven-week high. Norwegian aluminium giant Norsk Hydro increased production at its Brazilian refinery, Alunorte, after receiving approval from Brazil’s ANP to become a self-importing gas entity.
This production boost followed a 50% cut in alumina output on August 12 due to a gas shortage, which initially boosted NALCO, Hindalco, and Vedanta Aluminium shares by up to 8%. The market reacted negatively to the news of a potential supply increase from Alunorte, as the refinery's alumina production ramp-up could flood the global market with the key raw material for primary aluminium production, putting downward pressure on prices. Aluminium prices on the London Metal Exchange fell 1.6% to settle at $3,285.50 a tonne.
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