“Nalco Shares Crash 7%: Alumina Prices Plunge, Global Market Unrest Hits Hard! Here’s What You Need to Know”
National Aluminium Company (Nalco) shares have taken a beating, tumbling over 8% during intraday trading on December 12 and closing the day 7% lower at ₹251.80. This marks the third consecutive day of losses for the stock, leaving investors worried about what’s behind the downturn. Here’s an in-depth look at the factors driving this sharp decline and what it means for the company’s future.
Alumina Prices Under Pressure
A significant driver of the slump in Nalco’s share price is the steep drop in alumina prices, which have cooled off from above $800 to $724 on the London Metal Exchange. Alumina, a key input for aluminium production, is one of Nalco’s major revenue streams, and this price correction has directly impacted its financial outlook.
According to Santosh Meena, Head of Research at Swastika Investmart, “Nalco’s stock witnessed a 7% decline, primarily due to cooling alumina prices, which have softened in recent weeks.”
South32’s Surprise Production Guidance Withdrawal
Global market jitters intensified as Australian mining giant South32 withdrew its production guidance for its aluminium smelter in Mozambique. This move, attributed to widespread and deadly protests in the region, has further weighed on alumina demand. South32 had forecast 360,000 tons of aluminium output from the smelter, but the uncertainty surrounding production has sparked concerns among investors.
China’s Smelter Cuts Add to the Pressure
As if these issues weren’t enough, Chinese aluminium smelters are reportedly scaling back production due to a surge in raw material costs. This reduction in output is expected to dampen demand for alumina even further, exacerbating the downward pressure on prices.
A Long-Term Multibagger Story Under Threat?
Despite this week’s sharp decline, Nalco has delivered remarkable returns over the past year, with its stock surging 135% and emerging as a multibagger for investors. However, the recent developments are raising questions about whether this momentum can be sustained in the face of global market challenges.
What’s Next for Nalco Investors?
While the company faces short-term headwinds, analysts suggest keeping an eye on broader market trends and alumina price movements. The global aluminium market remains volatile, and any recovery in alumina prices or easing of production disruptions could provide some relief to Nalco’s stock.
Disclaimer: The information provided above is based on expert analysis and market trends. Investors are advised to consult certified financial advisors before making any investment decisions.
