Primary Aluminium News - Market

Aluminium demand in India poised to reach 5 mt by 2020

AL Circle
Indian aluminium industry is on a strong growth trajectory. Piggybacking buoyancy in the power and automotive sectors, the light metal used in appliances to aerospace, grew at a CAGR (compounded annual growth rate) of eight per cent during 2011-16. The same uptrend is expected to continue till 2020. The ‘Make in India’ drive will provide a further boost to the demand catapulting it to a level of five million tonnes (mt) by 2020 and eight mt by 2025 from the current 3.2 mt.

According to the Aluminium Association of India (AAI) and Crisil Research data, aluminium usage in India would scale higher on the back of increased power demand from 290 Giga watt (Gw) currently to 360 Gw by 2020-21. Auto industry demand too is projected to reach 38 million units by 2020-2021, up from 25 million units by FY17 end.

India’s building and construction sector is another sector where aluminium will find enhanced application. In a bid to adhere to international sustainability standards, more of aluminium construction systems will be used for upcoming housing projects.

Further, the defence sector of the country is opening up a gamut of opportunities for aluminium, which is used in defence equipment like ammunition hardware, military aircraft, and missiles in the form of rolled sheets, extrusions and forgings.

According to a senior industry professional, “The primary aluminium consumption has increased by 23 per cent and total aluminium consumption has increased by 13 per cent in last one year. This year, the projected growth in aluminium demand is 11 per cent. The consumption will be led by electrical & transport sectors and government initiatives on infrastructure, Smart Cities and Railways.”

Presently, electricals contribute a major share of India’s total aluminium consumption at 40 per cent; transport follows next with 23 per cent market share. However, with rapid urbanization, GDP rate growth, and resultant rise in per capita income, the consumption pattern of the white metal would change. Auto and packaging would come up in a big way to claim a major share each of the country’s aluminium consumption.

Investments totalling up to INR 1.5 lakh crore have been made by Indian aluminium producers in both the upstream and downstream sectors. While the primary aluminium capacity presently stands at two million tonnes per annum (mtpa), the manufacturers have diversified to add more downstream products like aluminium wire rods, extrusions, rolled sheets and foils in their portfolios.

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