ComTraCommodity - Aluminium

Team- TradegurusTeam members:-Suryanarayan Panda-Anmol Garg-Shubham Badkur Jain-Harshit Vyas

MBA IB 2014-16 BatchIndian Institute of Foreign Trade

Introducti

on

• Introduction

Domestic Aluminium Production

• Bauxite Producing Areas• Aluminium Production in India• Aluminium Production Analysis

International

Aluminium Production

• Bauxite Producing Countries• Aluminium Producing Countries• Region wise Aluminium Production• Aluminium Production Analysis• Key Production Drivers

AGENDA

INTRODUCTION

• Aluminium is a silvery white, soft, ductile metal. It is the third most abundant element, and the most abundant metal in the Earth's crust

• Among metals it is the second most used metal after steel and is the fastest growing metal in the last three decades

• It is light weight, ductile, durable, corrosion resistant and malleable

• Aluminium is produced from the mineral bauxite and involves large electricity input

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Source:Indian Minerals Yearbook 2012, Indian Bureau of Mines

Bauxite Production Production in Tonnes

State/Year 2009-10 2010-11 2011-12

Chhattisgarh 1687069 2109949 2365304

Goa 31050 100900 84700

Gujarat 2687306 938574 843497

Jharkhand 1670577 1855993 1830850

Karnataka 123316 64643 83019

Madhya Pradesh 1056847 616319 617146

Maharashtra 1985006 2133736 1937898

Odisha 4879580 4856808 5045888

Tamil Nadu 3342 45898 69092

Bauxite Producing Areas of India

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State/UT

2009-10 2010-11 2011-12 2012-13 (Up to January, 2013)#

Quantity (in tonnes)

Value (Rs. In crore)

Quantity (in tonnes)

Value (Rs. In crore)

Quantity (in tonnes)

Value (Rs. In crore)

Quantity (in tonnes)

Value (Rs. in crore)

Odisha 8,52,009.00 7,466.95 9,56,937.00 10,187.63 9,98,474.00 11,497.45 8,38,247* 10,366.48*

Chhatisgarh 2,68,425.00 2,950.00 2,55,298.00 3,327.00 2,45,654.00 3,114.00 2,06,053 2,761.00

Uttar Pradesh 3,99,198.00 2,822.72 4,09,958.00 3,132.28 4,18,268.00 3,812.28 1,92,468* 2,021.51*

Aluminium Production in India

Odisha Chhatisgarh Uttar Pradesh0

200,000

400,000

600,000

800,000

1,000,000

1,200,000

2009-20102010-20112011-2012

(In tonnes)

• Odisha is the largest bauxite producer of the country, having the country’s only PSU (NALCO) involved in the production of Aluminium

• Panchpatmali mines in Koraput are Asia’s largest bauxite mines

YearProduction (Quantity in tonnes; Value in

Rs.'000)

Quantity Value

2009-10 14,80,568 12,37,71,762

2010-11 16,21,033 16,28,44,955

2011-12(P) 16,54,156 18,36,57,146

State Wise Production

Annual National Production

Source: Press Information Bureau, Government of India, Ministry of Mines, March 2013

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Indian Aluminium Production Analysis

• Smelters operating below capacity due to unavailability of raw material on time

• Denial of environmental clearances for new mines

• Land acquisition problems

Non Availability of Bauxite

• Major Indian metal producers waiting for global price recovery

• Decline in domestic coal supplies

• Integrated companies not willing to spend on imported coal

Low global Aluminium

Prices

Key Factors Influencing Production Levels

Vedanta not allowed to mine from Niyamgiri hills

Coal shortages disrupting electricity generation

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Key Production Drivers

Electricity and Consumer Durables• Bulk of aluminium is used in overhead conductors

and power cables involved in electricity generation, transmission and distribution

• Use in consumer electronics for backing plates in TV, tablets and consumer electronics

Building and Infrastructure• Consumption in this sector expected to grow at a

CAGR of 18-20%• Demand for enhanced quality driving use of

Aluminium extrusions to construct stadiums, residential and shopping centres, bridges etc.

Transport and Packaging Industry• Higher production of automobiles, railway coaches

and increasing urbanisation• Rise in demand for aluminium in food packaging,

beverage industry and pharmaceutical

Growth of solar and wind energy is leading to rise in Aluminium consumption

Current Indian production is sufficient for the current demands

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Major Bauxite Producing Countries

Country Production (2013 production in thousand metric tons)

Australia 77000

China 47000

Brazil 34200

Indonesia 30000

India 19000

Guinea 17000

Jamaica 9500

Russia 5200

Kazakhstan 5100Australia China Brazil Indonesia India Guinea Jamaica Russia Kazakhstan

0

10000

20000

30000

40000

50000

60000

70000

80000

Production 2013 in Thousand tonnes

Production 2013 in Thousand tonnes

Highlights• Australia is the largest producer of Bauxite in the world•India is ranked 5th in terms of Bauxite production and 7th in terms of Aluminium production

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Source: www.world-aluminium.org/statistics

Major Aluminium Producing CountriesCountry Production(2013)

USA 1950

Argentina 460

Australia 1750

Bahrain 890

Brazil 1440

Canada 2900

China 21500

Germany 400

Iceland 825

India 1700

Mozambique 560

Norway 1200

Qatar 600

Russia 3950

South Africa 820

United Arab Emirates 1800

Other Countries 4650

Key Highlights•India ranks 7th in global aluminium production.•Per capita aluminium consumption in India is 1.3 Kg Vs. Global average of 8 Kilograms annually

Per capita aluminium consumption in Kilograms

United States; 1950 Australia; 1750Brazil; 1330

Canada; 2900

China; 21500

India; 1700

Norway; 1200

Russia; 3950

United Arab

Emirates; 1800

Other Countries;

9215

Production 2013

United StatesAustraliaBrazilCanadaChinaIndiaNorwayRussiaUnited Arab EmiratesOther Countries

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Source: www.unctad.org

Region wise Aluminium Production 2013

Global Aluminium Production (2009-2013), in thousand metric tonnes

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Source:www.world-aluminium.org

Global Aluminium Production Analysis

• Lots of power required in smelters for converting Alumina to Aluminium

• Main driver for production from Middle East and North West China

Cheap Power

• High bauxite exports from Australia and Indonesia

• China produces nearly 1/3rd of its Aluminium from imported bauxite

Bauxite Availability

Key Factors Influencing Production Levels

Abundant gas and gas based power available in Middle East

Greenfield Projects coming up in NW China due to cheap coal

Smelter closures in Europe due to ‘Carbon Tax’ leading to declining production

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Key Production Drivers

Transport Sector is the main consumer• Thrust towards light weight bodies to increase mileage• US EPA guidelines to reduce vehicle exhausts by reducing

weight• Companies emphasising on lightweight railway bogies to

reduce environmental impact and high quality exterior finish

Construction and Electrical Industry • Corrosion resistance, Recyclable, Lightweight and Durable • High copper prices prompting switch to aluminium in

electrical and industrial components• Primary building material in LEED buildings and

Sustainable Buildings

Packaging Industry • Rising use of aluminium foil in food preparation,

insulation and electronics• Lightweight package creation by merging of aluminium

foils with flexible films

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