Aluminium consumption in India picking up with GDP growth: Nalco CMD

Aluminium consumption in the country is slowly picking up in the backdrop of an increase in GDP to 7.3 to 7.5 % this fiscal. Growth in electrical & electronics sectors, construction, transport & automobiles are likely to trigger higher consumption, tough rising imports are a major concern for the industry, Nalco chairman T. K. Chand said recently.

"We are passing through a difficult time. World aluminium market is sluggish and is in a slump cycle. Global aluminium production has out-passed consumption by 2.6%, making a surplus of roughly 1.4 million tonne in 2015.

Slowdown in consumption in China has resulted in dumping of surplus production of that country in international market, making a steep fall in metal prices," Chand said. Incidentally, an average per capita consumption of 2.2 kg against a global average of 8 kg, represents the huge potential for aluminium consumption in the country.

At present, global aluminium prices are moving in a narrow band of around US $ 1500 per tonne, which is much below the cost of production of primary producers. Around 70% of companies in the world have reported cash loss. Many smelters have been closed and many more are resorting to production cut. "In India, though consumption is increasing by 6%, mainly on account of increase in demand in electric and electronics sectors, increase in import has become a matter of serious concern.

Volume of imports have crossed 1.6 million tonne in 2014-15 and is on the rise. Aluminium import constitutes 56% of total domestic consumption of metal, leaving only 44% of the market to domestic producers," Chand said.