The primary aluminium producers in the country continued their growth momentum despite a turmoil in global markets which has engendered deficit in supplies.
Contrary to the global production which has not kept pace with consumption, aluminium production in the country shot up from 0.58 million tonnes (mt) to 0.65 mt, a rise of 12.5 per cent during April-July period. The production growth was led by state run National Aluminium Company (Nalco) and Vedanta which exceeded the assigned targets.
In the period under review, Nalco produced 0.14 mt, outstripping its cumulative target of 0.13 during April-July. In doing so, the navratna company registered 8.14 per cent rise in metal production over the comparable period of last fiscal.
According to data on non-ferrous metals production collated by the Union mines ministry, Vedanta’s aluminium output in the above period, surged 49 per cent to 0.18 mt. The figure excludes Vedanta’s commercial production from its second plant at Jharsuguda (Odisha) which is under trial run. Vedanta Group owned BALCO’s smelter unit at Korba (Chhattisgarh) fell marginally shy of its production target at 0.19 mt though it bettered output figures compared to the same period of FY18.
The other major primary producer- Aditya Birla Group promoted Hindalco Industries, too, missed its production target during April-July by a mite, recording 0.135 mt of output.
World aluminium production by the end of September 2018 is projected at 48.09 mt against the consumption of 49.7 mt, thus meaning a shortage of 1.61 mt. Earlier, this month, aluminium prices on the London Metal Exchange (LME) touched six-week high of $2147.50 per tonne as strikes by Alcoa’s workers in western Australia sparked concerns on supplies. Aluminium prices had staged a rebound after tumbling to a 15-week low of $2000.85 on the LME in late July, buoyed by expectations that the US would allow aluminium manufactured by Rusal to trade in the global markets. But, the global aluminium market which is over 60 million tonnes annually in volume terms, is still in disarray, as concerns mount on supply constraints. Globally, aluminium deficit is seen at half a million tonne in calendar 2018 as the fundamentals remain tight.
Back home, India offers a contrasting picture with both Nalco and Vedanta looking to improve smelter capacity utilisations in this fiscal. In 2017-18, aluminium production by the primary producers totalled to 3.38 mt, growing 18 per cent over FY17 and clocking 11 per cent CAGR (compounded annual growth rate) between FY11 and FY18. The country’s aluminium consumption last fiscal at 3.62 mt was in excess of its indigenous production. According to data by the primary producers, imports had 54 per cent share in the domestic aluminium consumption pie and this share has been steadily rising.