Margins of domestic primary aluminium companies likely to shrink by 400-500 in Q2FY22: ICRA
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Owing to a twin onslaught of correction in aluminium prices and elevated input costs, rating agency Icra has said operating margins of the domestic primary aluminium companies are likely to shrink by 400-500 bps sequentially in the second quarter of 2022-23 (Q2FY23).
It mentioned international prices of aluminium have corrected by around 38 per cent from the record high of around 3900/tonne US dollar in March. While in the first quarter of FY23 the average LME aluminium spot prices remained at USD 2,870 per tonne, the same have corrected in the second quarter of FY'23 (YTD) to around USD 2,425 per tonne.
Further, it stated the cost of power for domestic aluminium producers continued to remain high, due to lesser supply of coal linkage to non-power sectors and high price of dry-fuel in both global and domestic markets.
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