Primary aluminium production in India likely to touch 2.4-2.5 mt

Production of primary aluminium is likely to touch 2.4 - 2.5 million tonne (mt) in 2015-16 up from the level of 2.04 mt in 2014 -15, led mainly by improved demand from transport and electrical sectors.

"With increasing investment by the central government in power transmission during 2014, India has seen improved demand growth from the electrical sector, which is likely to continue through 2015," Nalco chairman and managing director T K Chand said while speaking at the company's 34th annual general meeting. Demand growth is likely to be the highest in transport, building and construction sectors, but other sectors are also expected to grow simultaneously. It is estimated that by 2020, India would double its consumption to 5 million tonne, he added. In particular, beverage cans, alloy wheels, automobile bodies, railway coaches are expected to be future growth segments for aluminium. Use of aluminium in the housing sector is also slated to go up, particularly in the backdrop of growing environment concerns, he added.

However, volatility in aluminium prices, declining export premiums, fluctuations in US dollar exchange rates, slowdown in the global economy and growing competition from secondary producers in the domestic market have become a matter of concern, the Nalco chief said. Incidentally, current level of aluminium production is behind total installed smelting capacity of 4.1 mt.

"While domestic aluminium producers are facing problems due to slump in the metal prices worldwide, foreign players are dumping aluminium in the country currently taking advantage of the low import duty rate in India. We have recently requested Central Government to hike import duty and introduce safeguard duty to save the domestic industries. In fact, we have requested Govt. to declare all 98 smart cities as green cities, to enhance the use of aluminium," Chand said.

Globally too, the aluminium market remains sluggish and prices are hovering around 1550 dollar per tonne, which is lower than cost of production of primary producers. Slowdown in China is making that country dump its excess production in International market, with global prices dipping under supply side pressure. "Increased availability of metal in domestic market with no corresponding demand pick-up, keeps the domestic prices subdued. This situation is likely to continue for some time," he said.