According to a World Bank commodities report, aluminium prices on the LME will average $1,940 a tonne in 2019. These are currently driven by global macro economic uncertainty and the festering trade conflict between America and China. As a fallout, LME prices are down about 20 per cent year-to-date, at $1,809 a tonne. These had rocketed to $2,246 a tonne in April 2018, after the US curbs on UC Rusal, triggering panic in supplies.
Demand for primary aluminium has been fuelled by China’s planned curbs on scrap import. By 2020, China aims to completely ban import of scrap and metal waste. In India, demand growth is forecast to be robust at seven to eight per cent. The construction and packaging sectors are billed as the big demand drivers. The flat rolled products market is also growing at a steady pace of seven to eight per cent annually, spurred by transportation, construction and packaging. This growth is expected to continue over the next five years.
In its base metals industry outlook for this financial year, CARE Ratings has predicted growth of 3.7 per cent in primary aluminium production.
The Union government proposals for development of Smart Cities, rural electrification and a focus on renewable energy projects will support this.