I wish to discuss my personal opinion in brief on present market scenario and future prospects of alumina and aluminium projects in subsequent paragraphs.
These days aluminium price at London Metal Exchange (LME) is hovering at around US$ 1700 per tonne of metal. The figure is highly frustrating for those who are operating the alumina – aluminium plants across the globe as it has reduced the operating profits of respective companies to almost lowest level and in some cases it has dipped the profitability to unbearable negative side forcing the closure of many plants in the World. This scenario will not continue for longer duration as drop down in inventory level will force the upward turn to increase the demand vis-à-vis price of alumina and aluminium as well.
The data analysis and past trends clearly reveal that the aluminium metal price always follows the sinusoidal curve and the present level is very close to the lowest point of the trajectory. Thus the downward trend in LME price of this glittering metal is expected to continue for a maximum duration of about two years from now and will start moving upward thereafter in reverse direction from present trend.
In my personal opinion, it is the right time for the investors and promoters to take advantage of the available time period for fetching appreciable return on investments by putting up alumina and aluminium project in the close proximity of bauxite source in any country across the globe preferably in India, Vietnam and Indonesia. The total execution time for economically viable plant will be around three years from statutory clearances and financial decision which ever is later. Therefore, if the decision is taken right now, the payback period for such prestigious plant will be around 5 to 7 years with IRR of around 15% on capital investment.