Domestic aluminium consumption is poised to grow by 9-11% CAGR over the next five years to touch 5.3 MT by 2020-21 due to factors like higher growth in power and automotive sectors, a report said. As per Crisil and and Mtlexs, the first of its kind online marketplace catering to the Non-Ferrous Metal (NFM) industry, aluminium consumption in India is poised for a healthy growth over next five years, from 3.3 MT in 2015-16 to 5.3 MT in 2020-21.
"Traditionally, the Indian aluminium story is linked to the power and automotive sectors, which together take up nearly 60% of the consumption pie. We see that other sectors such as consumer durables are also poised to grow at a very healthy rate," said Suneel Mardia, CEO, Mtlexs. “With a relatively low per capita electricity consumption, very low household penetration of cars, and India on a strong growth trajectory in the foreseeable future, there is significant headroom for growth in the aluminium industry,” he added.
The growth will be aided by a host of government initiatives such as 'Make in India', 'Smart Cities', 'Housing for all', rural electrification and freight corridors. Crisil and Mtlexs unveiled the report on aluminium industry in India at the World Non-Ferrous Conference 2016 held in Mumbai last week.
The primary demand for increased consumption is expected to come from power sector, where aluminium is a cheaper, lightweight substitute for copper in transmission and distribution. Over the next five years, investments from state discoms and Central government schemes totalling Rs 4.3 trillion are being planned to expand India's transmission and distribution network, Crisil said.
Passenger vehicles penetration among households in India currently stands at a mere 9% compared to the world average of over 60%. With rising purchasing power, per capita income and improved rural infrastructure, there is bound to be a significant uptick in this metric in coming decades, Crisil Research Business Head Nagarajan Narasimhan said.