The Aluminium Industry in India

Posted By Team MCG On



Production of primary aluminium in India grew from one million tonnes in 2005 to 1.7 million tonnes in 2012. The three primary aluminium producers, viz. Hindalco, Vedanta and Nalco have expansion plans as well as greenfield projects that should take the production to 2.5 to 3.0 million tonnes in the foreseeable future.

The total aluminium usage (primary plus secondary) in the country is estimated at around 2.5 million tonnes in 2012. Aluminium is used mainly in the form of wire rods, castings, flat rolled products (FRP), foil, extrusions and derivatives thereof; the minor products include aluminium powder & paste and pellets for the steel industry. The principal user segment in India for aluminium continues to be the electrical & electronics sector accounting for 37% of the total usage followed by the automotive & transportation at 26% and building & construction at 11%. Packaging and consumer durable sectors accounted for 8% each while industrial and defence applications accounted for the balance 10%.

The demand for wire rods is driven by the investments in the power transmission and distribution networks which are now growing at a rapid pace. India has been a pioneer in the use of aluminium for cables & conductors for well over 50 years! Over 70% of the demand from the electrical sector is for wire rods. The growth in demand for solar energy has given rise to a large demand for aluminium extrusions.

The growth in the automobile sector has been one of the key drivers for the aluminium castings business. The country is one of the major producers and users of aluminium castings in the world and castings account for around 30 to 35% of the total aluminium usage in the country. India’s emergence as a hub for the manufacture of automobiles and the global drive towards reducing the curb weight of automobiles, will act as growth vectors in this sector. Flat rolled products and extrusions have significant usage in bus, truck and rail coach applications.

Conventional applications such as curtain walls, windows, doors as well as new applications such as formwork & scaffolding are driving the demand for aluminium extrusions in the ABC sector. After several decades of pedestrian growth, the aluminium extrusions sector is fast becoming vibrant with strong growth prospects and the demand is nearing the 400 kt per annum mark.

Aluminium-usage-in-india-percentIn the packaging sector, the aluminium coils are used for making beverage cans, aerosol cans and aluminium bottles. With the advent of 2-piece beverage cans, the demand for canstock is expected increase rapidly. Over 70% of aluminium foil used in India is for packaging applications. Pharmaceuticals followed by beverages, personal care and a wide range of food and non-food products, semi rigid containers and house foil are the principal applications of aluminium foil in India in the packaging sector. Aluminium foil also has key industrial applications such as finstock for airconditioning and cablewrap.

For several decades, the electrical sector was the backbone of the aluminium industry in India, accounting for about 50% of the domestic demand. Over the last two decades, other sectors such as transportation, building & construction, packaging and consumer durable  have gained ground and are forecast to grow rapidly. Overall, a 10 to 11% demand growth per annum, over the next 5 years, appears to be well within the reach of the aluminium industry in India.