Buoyant Global Demand Lifts India's Aluminum Exports by 36%

SEATTLE (Scrap Monster): The most recent trade statistics released by the Indian Ministry of Commerce and Industry suggests significant surge in aluminum export by the country during the last financial year. On the contrary, imports dropped heavily during this period. The production of primary aluminum reported significant increase during 2017-‘18.

The Indian aluminum exports surged higher by 36% from 1.22 million tonnes (Mt) in 2016-’17 to 1.66 Mt in 2017-’18. The largest destination of aluminum exports from India was South Korea, accounting for nearly 31% of the total Indian exports. The other major importers were Malaysia (30%) and the U.S. (11%). At the same time, imports of aluminum dropped sharply by almost 15% year-on-year to total 360,000 tonnes during the comparable period.

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The notable jump in exports was mainly on account of the rising global demand for the metal. The U.S. sanctions on Russia’s UC Rusal- the biggest producer of the metal outside China led to severe undersupply in the global market. This also led to 21% jump in aluminum prices in the London Metal Exchange (LME). The prices had touched six-year high in April, immediately after the U.S. sanctions on Rusal. The rise in input costs too contributed to the sharp rise in aluminum prices. According to industry experts the upward trend is expected to sustain in 2018-’19.

Meantime, the country’s primary aluminum production soared by 21% over the previous year to total 3.39 Mt in 2017-’18. The ramp-up in production was mainly due to better capacity utilizations rates at existing smelters. The production is expected to remain more or less stable at 3.42 Mt in 2018-’19.

The Ministry data also suggests that aluminum scrap imports recorded huge jump in volumes in 2017-’18. The imports were up sharply by over 20% to total 1.12 Mt. The low 2.5% duty structure on aluminum scrap imports is cited as the cause of increased imports.