NALCO Shares Fall 5% as Alunorte Restarts Production, Easing Supply Concerns

$NATIONALUM National Aluminium Co Ltd (NALCO) shares fell 5% on after Norsk Hydro’s Alunorte refinery in Brazil, one of the world’s largest alumina producers, ramped up production following a brief shutdown. Alunorte resumed operations after Brazil’s regulator ANP approved the refinery as a self-importer of natural gas. The plant also secured a temporary gas supply agreement with CELBA, allowing it to access the terminal and restore production. The production cutback at Alunorte is estimated to have resulted in a loss of around 100,000–120,000 tonnes of alumina. The development comes amid continued volatility in global aluminium markets. The Iran war disrupted aluminium flows from the Middle East, which accounts for roughly one-tenth of global production, sending aluminium prices and regional premiums sharply higher. While prices eased after the initial weeks of the conflict, they have rebounded since the end of June. Meanwhile, aluminium inventories at London Metal Exchange (LME) warehouses have continued to decline and are now close to 250,000 tonnes—their lowest level since November 1990—even as additional supplies have emerged from China and Indonesia. Norsk Hydro had warned last month that the global aluminium supply deficit could widen to more than 900,000 tonnes annually if trade through the Strait of Hormuz was not normalised. The restart of Alunorte’s production has therefore added fresh supply to an already tight market, weighing on aluminium-related stocks such as NALCO.