National Aluminium Company (NALCO) shares surge 14% in three sessions, here is why

Shares of National Aluminium Company (NALCO) surged for a third straight session on Thursday, March 5. In the last three trading session, NALCO shares have advanced as much as 14% and in intraday deals on Thursday, the stock jumped as much as 8.25% to hit high of ₹404.30 on the National Stock Exchange (NSE).

On the BSE, NALCO shares advanced as much as 8.2% to hit an intraday high of ₹404 amid spike in trading volume.

NALCO shares came under buying interest after reports suggested that Qatalum, a major aluminium smelter jointly owned by Hydro and Qatar Aluminium Manufacturing Co., has started a controlled shutdown of its aluminium production after its gas supplier signalled a forthcoming halt in gas supply.

Analysts say that controlled shutdown of the smelter at Qatalum could be positive for Indian aluminium producers as buyers would look for alternative options to source aluminium.

Amid controlled shutdown of the smelter, the price of aluminium in international markets surged to fresh 52-week high in the London Metal Exchange on Wednesday. Aluminium futures on LME surged as much as 2.55% to hit 52-week high of $3,418.50.

On the MCX, aluminium futures for delivery on March 31 climbed as much as 1.82% to ₹336.25 per kilogram.

A full restart could take 6–12 months or more, and the company has issued a force majeure notice to customers. This development has direct implications for global supply levels.

Qatalum is a 50/50 joint venture owned by Hydro and Qatar Aluminium Manufacturing Company Q.P.S.C. (QAMCO). The plant has a nameplate capacity of primary aluminium of 636,000 metric tonnes and a casthouse capacity of 664,000 metric tonnes. Qatalum is fully integrated with a smelter, casthouse, carbon plant, and dedicated gas-fired power plant.

Meanwhile, NALCO shares were witnessing spike in trading activity. Trading volume on the NSE spiked by 2 times to over 2.44 crore shares compared with an average trading volume of 1.32 crore shares.

On the BSE, as many as 28 lakh shares changed hands compared with an average of 5.21 lakh shares traded daily in the past two weeks.

As of 11:34 am, NALCO shares traded 5.8% higher at ₹395, outperforming the NIFTY Metal index which was up 2%.