However, the manufacturers are unlikely to go in for another price hike immediately. ``Another round of price hike will take place only in July if the current uptrend in international prices is sustained,'' said an FII analyst. However, producers may encounter the problem of excess supply in the domestic market if they go for another round of price hike. ``Last year, the production at Nalco was lower by 50,000 tonnes but this year, the supply is much better andhence, this may limit the hike in price,'' the analyst adds.

With firming global prices and recent depreciation in the rupee, aluminium majors are likely to augment their exports. ``In the case of Nalco, exports contribute around 34-35 per cent of the turnover while it is around 17 per cent for Hindalco. Thus, these companies have already proper channels in place and therefore, can go for higher exports,'' the analyst elaborated. Hindalco has the added advantage of being the cheapest aluminium manufacturer in the world.

Market players, including institutions, have zeroed in on aluminium stocks. Heavy institutional buying has been witnessed in Hindalco and Nalco. In the past few sessions, Hindalco has zoomed from Rs 551 on June 2 to the current level of Rs 632. On Tuesday, despite a bearish market, the stock at one time shot to hit the upper end of the ceiling at Rs 647 though it closed lower at Rs 632. Trading volume shot up to over 2.7 lakh shares on the Bombay Stock Exchange. Madras Aluminium too hasrisen from Rs 57 to the current level of Rs 70. On Tuesday, the stock zoomed from Rs 65.1 to the upper end of the filter at Rs 70. The Nalco counter on Tuesday saw a negotiated deal of 1.1 lakh shares at Rs 40 against its closing price of Rs 39.40 on the BSE.

The uptrend in the metal prices has come at just the right time for the Indian companies who were reeling under severe recession. The rollback of discounts and partial hike in prices augur well for companies like Hindalco, Nalco, Indal and Malco. The hike in prices would add directly to the bottomline and the year 1999-2000 which may well turnout to be the turnaround year for these companies engaged in the primary aluminium producers and downstream products. ``Calendar 2000 is expected to be a very bullish year for aluminimum producers,'' says an analyst.

Analysts expect the global aluminium prices to remain firm in 1999 mainly on account of revival in the global economy and no additional capacity coming up. ``A booming US economy and signs ofindustrial revival in south-east Asian economies, especially Japan and South Korea augur well for aluminium producers,'' says an analyst. International aluminium prices have been moving up since the beginning of Februray 1999 from their 5-year low of $ 1,150 per tonne.

The concern of a pick-up in the offtake still remains in the Indian market. Except for the electrical sector, other user sectors like transport are still reeling under a slowdown and the demand is unlikely to pick up at an alarming pace.