Of late, Indian aluminium
demand is aligning with the global demand, where growth is expected to fall 0.4 per cent in CY19, the lowest since the global financial crisis of 2008. Global markets
are projected to witness a deficit of 1.2 mt in calendar 2019, 0.1 mt shy of the 1.3 mt recorded in CY18.
“De-growth has been noticed in case of Flat Rolled Products because of subdued demand in transportation and construction. Slowdown in manufacturing, fragile consumer demand, and subdued investment have dragged consumption,” said an industry source.
In Q1 of FY20, the country's GDP growth touched a six-year low of five per cent. Latest estimates by the Reserve Bank of India (RBI) have pegged the domestic economy to grow at 6.1 per cent in FY20.
As domestic demand subsided, imports of aluminium
scrap went downhill, declining eight per cent in Q2 of this fiscal as against a spike of 25 per cent growth clocked in the corresponding period of Fy19. The plunge in imports should offer solace to the primary aluminium producers who have been wrestling with a swarm of imports.
In last fiscal year, aluminium imports
into the country touched an all-time high of 1.96 mt and valued at $2 billion, representing one per cent of the total imports by value. Scrap imports were the most pronounced, accounting for 57 per cent of the overall aluminium imports.
A low import duty of 2.5 per cent was driving inbound scrap volumes.