Indian aluminium smelter Hindalco said last week it plans to increase overseas sales of its output in the coming year to almost two-thirds, raising it from last year’s half-and-half split between domestic and foreign sales.
According to statements made by managing director Satish Pai, the move is the result of a significant downturn in domestic demand, which is itself the result of the current coronavirus pandemic and resulting quarantines. He noted that the current quarter may see overseas sales reach as much as 80 percent of the firm’s total.
“In the months of April and May, domestic demand was quite low due to the lockdown. This condition is currently mitigated by higher exports by domestic producers. Hindalco has exported around 80%-90% of its output in the last two months.”
Prior to the pandemic’s outbreak, Pai forecast an annual demand growth of between 6 and 7 percent. He did not reveal an updated forecast in last week’s comments.
At present, experts are predicting a global aluminium surplus of a record 3 million metric tons, with COVID-19’s effects blunting demand around the world. The London Metal Exchange is also reporting a three-year high in inventories, and both surpluses are credited to an 11-percent fall-off in aluminium prices during the current year as well.
Hindalco churned out 1.3 million metric tons of primary aluminium in 2019, a record for the firm. Its primary buyers are located across East Asia, Brazil, and the United States. Altogether Indian’s aluminium smelters combined to produce around 3.7 million metric tons last year, with domestic consumption of same nearly equaling output.