Alro Slatina makes 23 million euros from aluminium price hedging

Alro Slatina (ALR), the biggest aluminium mill in Central and Eastern Europe, posted 97 million RON (23 million euros) profit from operations designed to cover the risk of an aluminium price decline in the first half of this year. Early in 2008, the aluminium price went up fast on the commodities exchanges, as a result of speculative investments made by investors amid their fears of the international crisis, only to plummet later. Alro Slatina’s management used the increases of aluminium prices for the benefit of the company, which in April last year concluded several swap contracts worth a total of 250 million dollars with the London branches of some of the biggest investment banks in the world, that is Credit Suisse and JP Morgan Chase. With these contracts, Alro secured an aluminium sale price of more than 3,100 dollars/tonne despite the fact that the average sale price in the first half of this year stood at 1,423 dollars/tonne. Petrom too made 78 million-euro profit in the first half from similar operations, whereby it set a higher petroleum sale price than the one used on the international market.