| Date: |
16-02-2015 |
| Subject: |
Aluminium companies export more as home market slows down |
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MUMBAI: Hindalco Industries and Vedanta Resources, India's two largest aluminium producers, have stepped up exports amid increasing capacity and poor domestic demand.
Exports of primary aluminium from the country surged 65% in the first half of the current fiscal, according to the Centre for Monitoring Indian Economy, as demand slowed down at home due to a sluggish Economy, while overseas markets offered a better opportunity to Indian producers.
Hindalco has exported as much as half of its produce during this financial year, compared to less than a fifth last year, while Vedanta Resources exported about 40% of its output in India against about 30% in 2013-14. "If we find it is better, economical and makes sense to export, we will-...better than holding onto the stock," said Hindalco's managing director Debnarayan Bhattacharya. "We build capacity keeping in mind that you should be in the position to export. Otherwise you are making an assumption that may or may not come true," he said.
Kumar Mangalam Birla-led Hindalco is exporting aluminium produced at its new plants in Madhya Pradesh and Odisha that are being ramped up. Hindalco expects to produce 1.3 million tonnes (mt) of aluminium by the end of next financial year if coal auctions planned by the government go as per schedule. The company's larger rival Vedanta Resources, which is also in expansion phase, expects to produce 2.3 mt of aluminium by the end of 2016-17.
While India's aluminium production is expected to grow to about 4 mt in the next two years, it will be able to consume this amount only by 2020, according to a senior official with Vedanta Resources. This will leave producers with a huge overcapacity that is likely to hit prices unless it is used for exports. "Most of Indian capacity expansion has happened only in the last one year and will continue in the next two years. So, in this period, a lot of exports will be happening," said Puneet Jagatramka, head of central procurement and marketing at Sesa Sterlite Aluminium.
Source : economictimes.indiatimes.com
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