-
8/2/2019 do April'11
1/7
NBC/ED (MKTG)/
Date: 07.04.2011
Dear
The highlights of Marketing Department for the month of March
2011 are placed for yourkind information:
1. MARKET TRENDS
ALUMINIUM:
The 3-month LME aluminium prices traded in the range of
$.......0/t - $........0/t.
Aluminium put in a more solid performance, climbing to a
30-month high during thecourse of the month, with fundamental
stimulus stemming from the MENA unrest thataccounts for
approximately 10 percent of global smelting capacity. The aluminium
price
outperformed those of the other base metals compared with 6%-8%
falls in copper
through to tin the reason being that aluminium price had
previously lagged those of the
other base metals, and therefore had less to lose. More
importantly, aluminium remains
the only base metal with appreciable levels of production
capacity in the MENA region,
which has been beset by civil unrest since December. Analysts
view under the currentsituation was that, as the political risk in
the region increases this could deter further
investment in projects and any disruption to output or delays in
new projects wouldimpact available supply in the world and
significantly tighten the market.
Aluminium production being energy intensive, higher oil prices
were supportive due to
prospect of higher electricity cost inputs which would push up
smelter Business Costs andraise the marginal support level for
aluminium and thus provide a higher level of support
for the price. A weaker US dollar, increased investor inflows on
account of strong
economic data from the USA and Germany and CTA momentum based
funds led to new
longs buying from new shorts and signalled market bullishness.
Analysts however
comment that persistent debt issues in Portugal and Greece could
derail confidence inEurope and pull aluminium prices lower.
Demand in China faltered during the month as interest rates
impacted the ability to
obtain credit and lull during the holiday periods. Demand
rebounded in the USA in
transportation led by strong automotive, truck and trailer
sectors. In Europe, upwardsmomentum continued for rolled products
and foil demand but extrusions demand in the
construction sector remained lackluster. German automotive
exports remained strongbuoyed by demand from South East Asia.
Apprehension however lingered over high
levels of sovereign debt in Southern Europe and inflation
concerns in China and India
which analysts presume, could damage investor sentiment thereby
driving the price
lower from the highs set during March. Analysts also believe
that high copper priceswould also lend support to aluminium which
is considered as a natural hedge for copper.
The LME Stocks stood at million tonnes end Mar11 which is
slightly lower than the
Feb11 level of 4.611million by 0.09 million tonnes which
analysts coin as flirting with
Danger with 4.64 million tonnes record stocks during the period
of recession. Analystaalso comment that the incessant widening of
the Cash-3M contango structure would also
1
-
8/2/2019 do April'11
2/7
be supportive for the warehousing deals even in case of
concurrent hike in interest rates
by the Fed.
Average LME monthly Cash settlement and three-month sellers
prices from January11
to March11 are indicated below:
Month Cash Settlement Price (in USD) 3Month Price (in USD)
Jan11 Max 2489.00 2502.50
Avg 2439.53 2455.43
Min 2360.00 2382.00
Feb11 Max 2539.50 2567.00
Avg 2508.18 2531.80
Min 2474.00 2501.00
Mar11 Max
Avg
Min
ALUMINA :
Spot prices firmed during the month to trade in the $395 - 405/t
fob Australia range.Themarket was supported by a lack of near term
availability and stronger aluminium prices.In China, prices
gradually strengthen to trade in the US$427-434/t range on account
of
increase in volume traded since the end of the Chinese New Year
and increasing demandfrom smelters restarts as power constraints
eased resulting in refinery stocks decline.
Analysts estimate that global alumina production would decrease
with China accounting
for a major chunk of this decline due to high caustic soda
prices.
However, alumina production in South America maintained its
upward trend on the backof ramp-up at the Alumar refinery in Brazil
and the restart at the Ewarton refinery. Going
into the second quarter, analysts opine smelter grade alumina
demand to remain strong
and expect production to match this growth in demand thereby
supporting prices in near
term.
ROLLED PRODUCTS:
Rising consumer confidence in North America spurred on by the
extension of the Bushtax cut program and by the reduction in wage
taxes helped momentum in economic
recovery. Demand rebounded in the USA in transportation led by
strong automotive,
truck and trailer sectors. US FRP demand kept up some of the
momentum from 2010
during the first Quarter of 2011. There has been strong demand
from the transport
sector in particular, but due to the continued weakness in the
residential housing market,
off-take from the construction sector remains sluggish. Can
stock shipments remainedsteady as common ally margins held strong.
Billets demand continued to elevate
premiums as extruders expanded purchases of billet from the
Middle East and Russia.
Analysts expect y-o-y growth to ease back in Q2 2011 but
underlying volumes should
remain firm.
The Western European flat rolled products market maintained its
momentum, especially
within Germany. Off-take from the automotive and engineering
sectors remained solid
and activity has begun to improve in the aerospace sector. Firm
demand for products
such as can stock, brazing sheet and auto body sheet continued
to pressurize the
standards market causing rise in conversion margins as mills
focussed on higher value
products. Can stock consumption remained healthy on the back of
strong demand forcanned drinks. Foil demand in Western Europe
remained healthy on the back of firm
underlying demand. However, seasonal effects and a harsh winter
subdued the
2
-
8/2/2019 do April'11
3/7
construction sector thereby affecting extrusion demand.
Extrusions consumption in the
solar sector also suffered from harsh winter conditions.
Analysts expect demand toremain firm in Q2 2011.
Chinese aluminium semis market remained muted as the lull during
the Spring Festival,
labor shortage and additional monetary tightening stifled demand
further. With the
unravelling of the fraudulent activities in the Chinese Railways
the growth in railinfrastructure slackened.
2. EXPORTS
i) ALUMINIUM
During the month of Mar11, 9,888MT of metal was exported against
an internal target of
8,000MT. There was no Rolled Products exported this month. The
cumulative Exports for
FY 2010-11 was 98,200MT including 104MT of Rolled Products.
Further we have
..........MT of export orders for Metal in hand to be executed
in FY 2011-12.
ii) ALUMINA
During Mar11, 91,722MT of alumina was exported exceeding the
internal target of120,000MT. The cumulative export of Alumina for
the FY 2010-11 was 639,855MT.
Further, we have MT of export orders in hand for shipment during
FY 2011-12.
3. DOMESTIC SALES
i) ALUMINIUM
Total sale of 36,235MT was achieved during the month exceeding
the internal target of
28,150MT by 8,085MT. This includes .........MT sold from
stockyards. Pending DIs withSmelter Plant for despatches to parties
was .........MT at the end of the month. The
cumulative domestic metal sale for the FY 2010-11 is 340,752MT
exceeding thecumulative internal target of 322,650MT by 18,102MT.
The cumulative domestic sale is
the highest ever domestic sale achieved during a year surpassing
previous best of
289,032 achieved during FY 2009-10.
1,972MT of billets was sold in Mar11 against the internal target
of 2,000MT. The
cumulative billet sale for FY 2010-11 is 22,256MT against the
internal target of
22,850MT.
The wire rod sales during Mar11 have been 8,776MT exceeding the
internal target of
7,200MT. The cumulative sale of wire rod for FY 2010-11 is
75,106MT against an internal
target of 77,000MT.
The cumulative metal sale (including exports) for the FY 2010-11
is 438,952MT against
the internal target of 434,650MT and is 2,973MT more than total
sale for the same
period last year which was 435,979MT.
ii) ALUMINA & HYDRATE :
a) Total quantity of Calcined Alumina sold in the domestic
market = .........MT.
b) Total quantity of Alumina Hydrate sold in the domestic market
= .......MT (as
Hydrate).
c) Total quantity of Alumina Hydrate sold in the domestic market
= ........MT (as
Alumina).
3
-
8/2/2019 do April'11
4/7
4. PERFORMANCE AT A GLANCE(Figures in MT)
MARCH11 CUMULATIVE (2010-11)
SALES in MT Target Actual EX.(+)/S.F(-) Target Actual
EX.(+)/S.F(-)
METAL(DOM) 28,150 36,235 (+) 8,085 322,650 340,752 (+)
18,102
METAL(EXPORT)** 8,000 9,888 (+) 1,888 112,000 98,200@ (-)
13,800
TOTAL METAL 36,150 46,123 (+) 9,973 434,650 438,952 (+)
4,302
ALUMINA/HYDRATE
(EXPORT)120,000 91,722 (-) 28,278 690,000 639,855 (-) 50,145
HYD&ALUMINA
(DOM)*2,500 4,116 (+) 1,616 30,000 42,064 (+) 12,064
Total Alumina &
Hydrate122,500 95,838 (-) 26,662 720,000 681,919 (-) 38,081
ZEOLITE-A (DOM) - - - 3,854 -
Note: * including Spl. Hydrate and Spl. Alumina .** includes
export of Rolled Products.
@ - Considering the domestic MOU booking, the annual metal
export target has been scaled down toabout 92,000MT keeping the
total metal sales target intact at 435,000MT equivalent to the
production target.
5. INVENTORY OF FINISHED GOODS (SALEABLE):
i) ALUMINIUM ( all figures in MT)
PRODUCT As on31.01.11
As on28.02.11
Stock as on 31.03.2011 Total DI
Pending as on31.03.11
At PlantAt
PlantAt
PortsAt
S/YsTotal
Ingot/ T - Ingots 8268 6955
Sow 1735 931
Billet 2505 2912
Wire rod 5141 3958
4
-
8/2/2019 do April'11
5/7
Strips 0 0
Rolled 1705 2028
Total 19353 16784
ii) ALUMINA
LOCATION
Stock as on
31.01.11
(IN MT)
Stock as on
28.02.11
(IN MT)
Stock as on 31.03.11
(IN MT)
At Damanjodi 35228 23367
At Vizag 31562 30812
Transit to Vizag 10482 5200
Total 77272 59379At Angul 16189 20850
Transit to Angul 5200 10400
Total 21389 31250
Grand Total 98661 90629
6. TRAFFIC
The performance highlights of traffic department for the month
are given below:
Movement of UNIT Target Actual
1 Alumina to Angul MT
2 Alumina to Vizag MT
3 Metal to Ports * MT4 Coal to Damanjodi MT
5 CP Coke to Smelter MT
6 Fuel Oil (Smelter & Damanjodi) KL
7 Caustic soda to Damanjodi** DMT
*Includes stockyard movement also.** By Rail only.
7. SPECIAL PRODUCTS
i) Zeolite-A:
During the month 1MT of Zeolite-A has been sold. There has been
no production of
Zeolite-A since Jan11 for non-availability of raw material
Sodium Silicate. Though therehas been repeated request from
marketing to procure Sodium Silicate and produce
Zeolite-A, the same has not yet been procured resulting in
production halt.
ii) Spl Hydrate & Spl Alumina
During the month ........MT of special alumina and ........MT of
special Hydrate (asAlumina) was sold in the Domestic market. Plant
has been asked to improve production
of Special products and expand the product-mix to meet demand
for these products.Marketing has time and again requested for
advance procurement of saggers so that
production of Special alumina could be enhanced. However there
has been delay in
5
-
8/2/2019 do April'11
6/7
procurement of saggers for FY 11-12 resulting in drop in
production.
iii) Flat Rolled Products :
2,469MT of Rolled Products was sold in the domestic market this
month. Rolling Plant
has indicated that it would improve production rate of Rolled
products with assistancefrom the Strip casting plant. Plant has
been instructed to manufacture strictly as per
agreed product-mix only.
8. CUSTOMER COMPLAINTS
A summary of pending complaints is placed at Annexure-I for
perusal.
However, priority is being given to resolution of customer
complaints and continuousproactive efforts are being taken for
reduction of complaints. Smelter Plant is being
continuously advised to take preventive steps so that complaints
of repetitive nature
are avoided.
9. ASSISTANCE REQUIRED
1. Production of saleable metal & refinery products of
required quantity/quality as
per the Production-Marketing Meeting held with smelter &
refinery should be made
available both for rake & plant despatches. Production of
Rolled Products as permarket requirements for MOU customers, PSUs,
RTCs needs special attention and
support.
2. More support from Production, Despatch and ERP team is
required to streamline
S&D module activities post - go live. Further support from
M/s Wipro consultants is
required for further development and stabilization of
operations/process in SD
module. This would ensure customer satisfaction.
(P.K. Parida)
Shri Ansuman DasDirector(Commercial)
NALCO,Bhubaneswar.
6
-
8/2/2019 do April'11
7/7
Dated: 07.04.2011
DRAFT D.O. LETTER
The draft D.O.letter for March, 2011 is enclosed for kind
perusal. The relevantportions may kindly be updated please.
Submitted please.
(G.H. Mohapatra)
Sr. Manager (MKTG)
CMM (Domestic-Mktg.) EC
CMM (Domestic Mktg.) - CG
DGM ( EXP, CHEM & ROLLED PRODUCTS)
ED (MKTG)
7
