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Indian Aluminium Makers Ramp Up Exports

Metal News - Published on Fri, 22 May 2020

Image Source: Indian Aluminium Coronavirus
A recent sector report by Crisil said that Indian aluminium makers will sail through the impacts of the viral disruption smoothly with rising aluminium exports, lower input costs and cost efficiency strategies followed by the industry. It said "The lockdown has not affected production because aluminium is an essential commodity. However, domestic demand largely from the power transmission, automobiles and construction sectors has plummeted. The domestic sales loss has been offset by companies adroitly exporting more, thanks to high cost-competitiveness that stems from improved sourcing and lower input costs. Aluminium price in FY 2021 started with 4-year lows of USD 1,450 per tonne on the London Metal Exchange, and domestic demand evaporated because of the Covid-19 pandemic-driven lockdown. While that will squeeze bottom lines this fiscal, efficient cost structure and adequate cash would buffer credit profiles and help them weather the viral disruption.”

Domestic as well as global aluminium demand is expected to witness de-growth in fiscal 2021 amidst the Covid-19. However, with likely strong demand fundamentals, in the post-Covid era, global aluminium demand may grow around 3% annually. Domestic demand is estimated to grow around 5%, owing to increasing penetration in the power transmission and automobile sectors. This bounce-back may see aluminium makers restore their financial metrics.

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Posted By : Yogender Pancholi on Fri, 22 May 2020
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