Novelis urged to sell aluminum afield as demand in China wanes

Weaker demand of aluminium in China and overcapacity in can market will make Novelis look for new markets outside Asia for aluminium sheet that are produced at the new rolling mills in South Korea, said Phil Martens, the Chief Executive officer.

The challenging conditions in China have forced Novelis to put their investment in Asia currently on hold for the coming future, Martens said the analyst.
He said this after the net income of Novelis in the fiscal year to march end was reported $104 million and the company witnessed a drop in their sales to $9.8 billion.

Novelis will now start up an automotive plant in China in 2014 after the completion of $400 mn expansion at its recycling as well as two rolling plants in South Korea.

"We're comfortable with that investment, (but) we have decided not to deploy more capital in Asia," he said.

In a conversation with Reuters, Martens said around 40% of Korean materials remain in the country along with another portion going to countries such as Australia and Thailand.

Some portions of the metal go to United States and Europe, but Martens is of the view that the amount to be exported will be higher than expectations. The Korean plant also plans to supply coils to Chinese plant.

The laidback outlook will reinforce various concerns about the economic slowdown in China after years of meteoric growth fueling demand for the industrial metals.