Karvy Research   Desk

Aluminum Sector

  

Demand Supply

The main factors that influence demand for aluminum metal in India include growth in industrial production/user industries, and international aluminum prices. The main demand driver for aluminum in India is the electrical sector, which represents 36% of the total aluminum demand. This is followed by the transport sector (22% of the total demand), durable and packaging sectors (12% each). The construction sector accounts for 7% of the total aluminum demand.

The production of aluminum registered an estimated growth of 15% in FY2000. This was largely due to the fact that capacity utilization of the plants producing aluminum reached a phenomenal 94%. This was largely driven by the notable increase in consumption both in the domestic and export markets. Of late, there has been an increasing focus on recycling aluminum as it is cost–effective, saves the reserves of bauxite for the future, and is environment-friendly (as no smelting process emissions are generated).

INDAL is the leading manufacturer of rolled products with a capacity of 0.09 million tpa followed by Hindalco (capacity of 0.08 million tpa); Balco (capacity of 0.04 million tpa); and Pennar Aluminum (capacity of 0.03 million tpa).

 Current and Forecast Capacity of Semi-Fabricated Products

(in '000 tons) 

Item

Current Capacity

2003

2005

2008

Sheet

293

276

414

552

Foil

56

80

54

78

Extrusions

135

166

249

332

Forging

110

145

218

290

Wire Rods

195

220

330

440

Others

25

35

40

45

In the extruded products segment, Hindalco has the distinction of being the market leader with a capacity of 10,400 tpa, followed by INDAL (capacity of 8,000 tpa). India Foils ranks first in the manufacture of aluminum foils with a capacity of 19,000 tpa, followed by INDAL (capacity of 6,000 tpa) and, Sterlite and Hindalco (both with a capacity of 5,000 tpa each).

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