India rising in the world of aluminum

The Mumbai-based Aditya Birla Group entered 2018 as a significant player in global aluminum production, considering its ownership of India’s Hindalco and Atlanta-based Novelis.

In late July, the multinational firm made a move to grow its global aluminum portfolio with its $2.6 billion bid for Aleris, a United States-based firm that has melt shops and rolling mills in North America and Europe.

If the deal is approved, the Novelis subsidiary of Aditya Birla will acquire Aleris’ 13 global manufacturing facilities. That includes melt shops that consume aluminum scrap in several locations in the U.S. The acquisition also will include 100,000 metric tons of auto alloys capacity at the Aleris facility in Duffel, Belgium.

In addition, the deal will boost Novelis’ operations in China, according to the firm. Aleris’ Zhenjiang, China, facility is near Novelis’ existing Changzhou plant, which could provide greater opportunity for customer collaboration, says Novelis.

The proposed deal sends a signal relevant to India’s growing presence in the aluminum sector, but it is a presence that goes well beyond the actions of Aditya Birla Group.

MORE HIGHWAYS AND MORE VEHICLES

In an essay promoting its 2019 Aluminium India event, Reed Exhibitions Deutschland GmbH refers to India as “one of the fastest growing aluminum markets,” remarking that the industry there “is adding capacity and investing in new technologies to satisfy the rising demand from sectors like transport and construction.”

The company sees its 2019 India Aluminium conference, to be held Jan. 31-Feb. 2 in the city of Bhubaneswar, as bringing together a growing and vibrant industry in that nation.

The Reed organization notes the Indian government is investing in excess of $1 billion in infrastructure projects, a circumstance that helps explain why some forecasters expect demand for aluminum in India to rise by double-digit figures in each of the next 10 years. 

Although some of the new capacity expected will be for primary aluminum, some of the sectors demanding aluminum, including packaging and the automotive die casting sectors, are also poised to boost the demand for secondary products.

India’s growing production of automobiles, motorcycles and off-road equipment is creating increased demand for scrap-containing aluminum alloys.

The trend has been clear throughout this decade. At the 2015 MRAI (Material Recycling Association of India) convention, speakers provided details portraying the growing trend.

Mohan Agarwal of Haryana, India-based Century Metal Recycling Pvt. Ltd. told MRAI attendees that by that point India had risen to become the seventh largest automaker globally and the second largest producer of two-wheeled vehicles (motor scooters and motorcycles).

With the motor vehicle industry as a major customer, Century Metal Recycling grew in just nine years to operate seven secondary aluminum and zinc alloys plants in India with a combined 225,000 metric tons of annual capacity.

Both globally and in India, Agarwal said aluminum “plays an increasingly significant role” in vehicle production as manufacturers seek fuel efficiency and reduced carbon emissions. Agarwal cited studies that point to 132 kilograms (291 pounds) of aluminum in the average car now. That figure is expected to increase to 200 kilograms (441 pounds) of aluminum by 2021, “with most of the growth in car bodies.”

SEEKING EASIER ACCESS

For scrap shippers in the rest of the world trying to feed Indian furnaces, both logistics and regulations can create frustrating circumstances when trying to serve the market.

Scrap recyclers in several nations received encouraging news in May 2018, when the Washington-based Institute of Scrap Recycling Industries (ISRI) issued an alert to its members with “very positive news” from India’s government. In May, the country lifted the preshipment inspection certification (PSIC) requirement for all scrap metal from the U.S., the United Kingdom, Canada, New Zealand and Australia through certain ports.

The alert stated in part, “The Directorate General of Foreign Trade (DGFT) has lifted the preshipment inspection certification (PSIC) requirement for all metal scrap from [those nations] that enter the ports of Chennai, Tuticorin, Kandla, Jawaharlal Nehru Port Trust (JNPT), Mumbai and Krishnapatnam.”

Continued ISRI, “Consignments are required to be accompanied by a ‘certificate from the supplier/shipyard authority to the effect that it does not contain any radioactive materials/explosives.’ The materials will go through ‘radiation and explosive checks’ at these ports, which have installed appropriate radiation detection equipment.”

ISRI credited the MRAI for is “more than three years of advocacy” on the issue.

The trade group also cautioned, “Material that is bound for the other nine ports of entry approved to process scrap imports still requires PSIC. We were told in October [2017] that these ports are in the process of installing radiation detection equipment, and when they have been fully tested and are operational, it is possible that the PSIC requirements will eventually be lifted there, too.”