Aluminium import surge in India hurts domestic production during April-June quarter – Source says
According to a recent report, a 7 per cent growth in aluminium demand in India during April-June quarter of the financial year 2019-20 failed to boost production as consumption remained moderate in industries facing liquidity crunch. Sales of aluminium companies also fell by 10.8 per cent in that period as imports grabbed a bigger share of the consumption pie.
“The share of imports to domestic aluminium consumption has risen to 60 per cent at the end of June. Overall imports witnessed spike of eight per cent while scrap imports rose eight per cent in the June quarter. The unabated rise in imports is worrisome for the primary aluminium producers,” said an industry source.
In FY2019, aluminium imports had risen to 2.3 million tonnes, resulting in a forex outgo of $5.5 billion or 1 per cent of the imports by value.
Besides, decline of international aluminium prices on the London Metal Exchange (LME) disquieted major aluminium players in India, including Hindalco Industries, Vedanta Ltd., and National Aluminium Company Ltd. (Nalco). Global aluminium prices on the LME dropped 21 per cent year-on-year during April-June quarter to average at $1793 per tonne. The LME prices for aluminium for the cash buyer further plunged to $1762 per tonne, as of August 2019.
Meanwhile, in calendar 2019, the global can stock market has started signs of growth bolstered by continuous efforts to shift from glass to cans in aluminium packaging. In the domestic market, the demand for aluminium flat rolled products (FRP) expanded at a pace of 4 per cent year on year in Q1 FY20, strengthened by construction and packaging segments. Between FY18 and FY22, the FRP segment is expected to grow at a CAGR of 7 per cent, benefitting companies like Hindalco.
source: Alcircle
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