India’s aluminium tubes or pipe fittings imports post 19% QoQ growth in Q4 2016-17

India’s merchandise imports posted a double digit growth for the second month in a row, growing at 45.3 per cent year-on-year in March 2017. A buoyant domestic demand saw consumption of core goods increasing steadily, the primary drivers being oil and gold. Global analytics company Crisil suggests higher oil prices will keep import growth elevated in fiscal 2018 compared with fiscal 2017. Quarterly trade data shows India’s aluminium tubes or pipe fittings import kept growing at a moderate rate through FY 2016-17.

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Aluminium tubes or pipe fittings are widely used for various fabrication projects. They are preferred over other materials because of their unbeatable strength to weight ratio.

India imported 100 tonnes of aluminium tubes or pipe fittings in the first quarter of fiscal 2017. The volume imported jumped significantly to reach 172 tonnes in the second quarter. In third quarter, the imports shrank to stand at only 116 tonnes. In the fourth quarter of the last fiscal, that is, during the initial three months of 2017, the volume surged again to reach 138 tonnes, up 19 per cent QoQ.

The value of aluminium tubes or pipe fittings imports has also fluctuated quarter over quarter through FY 2017. The value peaked in second quarter when it was estimated at US$1.92 million. This was followed by a drop in the third quarter when the value reached US$1.4 million. In the final quarter, however, the import value surged; the cost of import totalled at US$1.8 million, up 28.5per cent QoQ.

India imported its major chunk of aluminium tubes or pipe fittings from China (119 tonnes) and South Korea (184 tonnes) in 2016. The rest of the demand was met by the products manufactured by the domestic aluminium tubes or pipe fittings manufacturers. The last fiscal year saw these MSMEs grow their business under the government’s Make in India drive.

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India is looking at moderate demand growth for aluminium over 2016 to 2021 because of cooling Chinese economy and extended Eurozone crisis. The domestic demand for the metal is expected to post robust growth on back of investments in the construction and power sector.

As the global demand-supply balance begins to ease, realisations are expected to improve, while reducing input costs are expected to support an improvement in profitability for domestic producers in the near term, Crisil observes in its recent report.