India Steps Up Aluminum Production, Despite Surplus Chinese Imports

Indian aluminum is flying through some turbulence right now as neighbor China tries to push some of its surplus aluminum into India. At the same time, for some Indian manufacturers of the metal, the Chinese imports are no deterrence to capacity expansion.

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National Aluminium Company (NALCO) is a case in point. Late last week, its board approved a major capacity expansion plan to set up a one million-metric-ton alumina refinery in the Odisha province for about $860 million. NALCO plans to use bauxite from its captive mine in the same province for this project. Executives there say they anticipate a spurt in demand because of the “Make in India” campaign, hence the move.

NALCO’s New Park

NALCO has  a committed client, as well. 50,000 mt of aluminum metal to be supplied to Angul Aluminium Park, a joint venture between NALCO and the Industrial Development Corporation of Odisha.

Elsewhere, Sesa Sterlite, a Vedanta Group company, too, contemplates ramping up its aluminum capacity at its Jharsugda plant, again in Odisha. CEO Tom Albanese went on record saying his company was actively thinking of stepping up aluminum production.

For now, Sesa operates the plant at about 25% of installed capacity. What stands in the way is limited electricity supply and s raw materiadl crunch (bauxite), both of which Sesa claims to be working on.

New Hindalco Capacity

Another aluminum major, Hindalco, is in the process of adding 720,000 mt of smelting capacity since April 2013, trying to step into the gaps left by plants shuttered in North America, Australia and Europe.

In fact, Indian exports of aluminum have been on the rise for some time now, since local use had gone down because of the economy grinding to a standstill until the election of the new government in May last.

Aluminum from Hindalco’s Mahan unit in Madhya Pradesh province is being shipped to countries such as Japan and South Korea, the US, and some African nations. A surge in demand for aluminum especially by the automobile industry and for use in cans was the driver, benefiting Hindalco and others.

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