ICRA projects demand for base metals to remain positive in India

Rating agency ICRA projected that the long- term demand for base metal would continue to be positive in India. The government’s investment on infrastructure projects for the smart city plan would drive the demand for base metals such as aluminium, copper and zinc.

According to the report of ICRA, "In the long-term, demand of base metals in India remain positive, driven by investments in infrastructure projects for the power transmission and distribution sector, urban housing and smart city programmes of the government."

In the first nine months of the financial year 2017, the rise in consumption of aluminium remained at 10 per cent because of the demand from the power transmission and distribution and the automobile sectors.

ICRA said the growth in consumption of domestic primary aluminium saw a decline in the third quarter of 2016-17 due to the use of downstream products that had gathered during the first six months of the financial year.

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The deficit in the global aluminium market is likely to increase more in CY2017 as a result of up to three million tonne of production cuts in China.

After the imposition of a new air pollution control regime in Beijing, alumina refineries and aluminium smelters would cut production by 30 per cent from the current levels in the winter months of November through March.

ICRA Senior Vice-President and Group Head, Corporate Sector Ratings Jayanta Roy said, "While the outlook on international aluminium prices is favourable, zinc and copper prices are unlikely to increase significantly from the current levels."