Operating margins of the domestic primary are likely to shrink by 400-500 bps sequentially in the second quarter of 2022-23 due to factors like high input costs, rating agency said on Thursday.

“Owing to a twin onslaught of correction in aluminium prices and elevated input costs, the estimated operating profitability of ICRA’s sample set of domestic players is likely to contract sequentially by almost 400-500 bps in Q2 FY2023 compared to Q1 FY2023,” said in a statement.

International prices of aluminium have corrected by around 38 per cent from the record high of around 3900/tonne US 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, 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.

(Only the headline and picture of this report may have been reworked by the Business Standard staff; the rest of the content is auto-generated from a syndicated feed.)

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