National Aluminium Company (Nalco) and Hindalco Industries fell as much as 2.5% as aluminium prices declined

$NATIONALUM Shares of National Aluminium Company (Nalco) and Hindalco Industries fell as much as 2.5% as aluminium prices declined for a second consecutive session. The drop followed an announcement by Emirates Global Aluminium PJSC that it plans to restore production earlier than expected, easing concerns over a potential supply shortage. Emirates Global Aluminium, one of the Middle East’s largest aluminium producers, expects to return output to pre-war levels by the first quarter of next year. Its main smelter was shut following an Iranian strike in March. The announcement triggered a sharp decline in aluminium prices on Wednesday. Before the recent pullback, aluminium had gained for seven consecutive sessions as tensions between Iran and the US raised concerns over the Strait of Hormuz, a key export route for regional smelters. Meanwhile, aluminium inventories at the London Metal Exchange are at their lowest level since 1990, highlighting tight global supplies. Nalco shares were trading 2.5% lower, while Hindalco declined 2.5%. The Nifty Metal index was down 0.8%. Supply concerns were also eased after the owners of Australia’s largest aluminium smelter secured a A$2.5 billion government bailout on Thursday. The support package will allow the 590,000-tonne-a-year Tomago smelter to continue operations. Although the rescue was largely anticipated, it reflects growing government efforts to support loss-making aluminium production capacity. Market participants now expect aluminium prices to face pressure as supply conditions improve. Chaos Ternary Futures Co. said aluminium is trading at relatively high levels and warned that a gradual shift toward a supply surplus could weigh on prices over the medium term. Aluminium fell 0.9%. Other base metals also traded lower, with copper declining 0.4% and zinc falling 0.8%.