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Aluminium

Aluminium compounds form eight per cent of the earth's crust and aluminium is the third most common crustal metal on earth. Aluminium is commonly known as Aluminium. Pure aluminium is a soft lightweight metal. Mixed with small, often minute, quantities of other materials – iron, silicon, zinc, copper, magnesium, tin, titanium, lithium, chromium, tungsten, manganese, nickel, zirconium and boron - it is possible to produce an array of alloys with specific properties for very different purposes. The discovery, successful extraction and the first commercial applications of aluminium took place in the 19th Century.
Aluminium is very strong, light, ductile, and malleable. It is an excellent conductor of heat and electricity. It can be cast, rolled or extruded into an infinite variety of shapes. It has unique barrier properties as a packaging material, it resists corrosion and it can be recycled with no loss of quality or properties.
 
Important Uses:
Aluminium is most commonly formed as alloy though with a marginal quantities. The most commonly used alloying agents or metals are copper, magnesium, manganese and silicon in very minor quantities.
Aluminium is extensively used in industries like transportation, packaging, construction, cookware, electrical transmission, electronic appliances etc.
 
Mineral Source:
Aluminium ore is bauxite, occurs mainly in tropical and sub-tropical areas: Africa, West Indies, South America and Australia. There are also some deposits in Europe.
Bauxite is refined into aluminium oxide trihydrate (alumina) and then electrolytically reduced into metallic aluminium.
 
Production:
Alumina is extracted using smelting process. Liquid aluminium is produced by the electrolytic reduction of alumina dissolved in an electrolyte (bath) mainly containing Cryolite. Aluminium is formed at about 900°C, but once formed has a melting point of only 660°C.
 
Recovery: Two to three tons of bauxite is required to produce one tonne of alumina and two tons of alumina is required to produce one tonne of aluminium metal.
Recycled metal requires only 5% of the energy required to make new metal. Blending recycled metal with new metal allows saving large amount of considerable energy, as well as the efficient use of the extra heat available. At the same time, there is no difference between primary metal and recycled metal.
 
 
World Scenario
 
 
China is the single largest producer of Aluminium contributing for about 44% of total world production as per the estimates released by the US Geological Survey in Feb 2014. Russia is the second largest producer accounting for about 8.4% followed by Canada, U.S. and Australia with about 6.1%, 4.5% and 4.1%, respectively.
 
 
Table 1: Trends in World Aluminium mine production (1000 tons)

 
2009
2010
2011
2012
2013
China
12900
16200
18100
20300
21500
Russia
3815
3947
3912
3850
3950
Canada
3030
2963
2984
2780
2900
U. S.
1727
1726
1986
2070
1950
Australia
1943
1928
1945
1860
1750
U.A.E
1010
1400
1800
1820
1800
India
1598
1607
1667
1700
1700
Brazil
1536
1536
1440
1440
1330
Norway
1139
1109
1122
1150
1200
Others
8602
8784
9444
8930
9220
World
37300
41200
44400
45900
47300

Source: USGS
 
China is the largest consumer of Aluminium in the world accounting for over 45% of world consumption as per the latest estimates available for 2013. Asia excluding China accounts for about 20% of world’s consumption followed by Europe excluding Russia with 15% and North America with 11% and others with 9% of total consumption.
 
 
 
Pattern of major consuming industries in the world indicate that transport and construction industries consume about 50% of total aluminium consumption in the world. Packaging industry accounts for about 17% followed by electrical industry with 12%, machinery and equipment with 10% and consumer durables with 6% of world’s consumption.
 
Domestic Scenario
 
India occupies the fifth position in terms of bauxite reserves at about 5 billion tons. But in terms of production, India stands in the seventh place. India’s output accounts for only 3.7% of world production. Among states, Odisha and Andhra Pradesh account for more than 90% of reserves in the country. In terms of consumption, India is the fifth largest in the world. Per capita consumption of aluminium in India is much lower at 1.3 kg compared to that of the world average at 12-15 kg.
 
 
Table 2: Trends in production of Aluminium in India (1000 tons)

 
Aluminium Smelter
Alumina Refinery
Bauxite Mine
2010
1610
3802
10920
2011
1660
7241
10920
2012
1708
4987
11220
2013
1714
9920
13920
2014
1989
10120
15220

Source: Thomson Reuters
 
In India, there are three major primary aluminium producers. National Aluminium Co. Ltd., Hindalco Industries Ltd and Vedanta Aluminium Ltd (VAL). Total annual installed capacity of aluminium in the country stood at 18.88 lakh tons in 2013. The primary producers are largely involved in sheet and foil production. However, they are also expanding to extrusions business, which is dominated by secondary aluminium manufacturers.
 
 
 
 
Consumption pattern of aluminum in India is different from that of world. The largest industry is electrical industry accounting for about 48% of total aluminium consumed in the country followed transport sector with 15%, construction with 13%, machinery & equipment with 7% and consumer durables with 7% of total consumption.
 
Table 3: Trends in domestic demand and supply of Aluminium (1000 tons)

 
Production
Consumption
Exports
Imports
2009
1598
1458
278
250
2010
1607
1475
353
320
2011
1667
1569
338
379
2012
1714
1687
415
256
2013P
1989
1900
425
300

P: Projected based on industry sources           Source: USGS, Indian Bureau of Mines (IBM)
 
Recycling of aluminium is encouraged all over the world and India is also adopting similar policies, as recycling is lees capital intensive, less polluting and more energy efficient. However, recycling of aluminium is limited to unorganized sector confining mostly to utensils and casting industry. Nevertheless, according to the IBM estimates, the recycling industry may contribute for over 35-40% of total aluminium consumption in the country.
 
Major Markets
 
Spot markets: Mumbai, Delhi
 
Futures markets:
International: Comex, LME and SHFE.
Domestic: MCX and NMCE.
 


Scrap Segment


Aluminium scrap is recycled and used to a significant extent in the domestic market. Various forms of scrap available in the domestic market are explained below. 

 

Varieties: Aluminum Bartan, Purja, ingot, section and wire.

 

Major Markets:  Delhi, Mumbai, Bangalore, Chennai and Hyderabad

 
 
 
 
 
External Trade
 
Export and imports of aluminium ores and concentrates including natural bauxite and others are permitted freely as per the Foreign Trade Policy for 2009-2014.
 
 
Major export destinations: south Korea, Japan, China and U.S.
 
Major import sources: China, Iran and U.S.
 
 
Factors Influencing Prices:
 
·         Largely governed by the international markets and their price trends
 
·         Growth and performance of major utilizing industries
 
·         Government policies on trade both direct (restrictions) and indirect (taxes).
 
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