India’s Hindalco Industries Ltd. plans to sell about two-thirds of its output overseas this year as local demand gets hit by the coronavirus pandemic. Exports during the year that started April will increase to as much as 65 per cent of total output compared with 50 per cent last year, Managing Director Satish Pai said, adding the company expects to sell 75 per cent to 80 per cent of its total metal output to overseas customers in the April-June quarter.
India's demand over the last couple of months has been decimated by the world's largest lockdown imposed in March. While the measures are now slowly being eased, the country is heading towards its first annual economic growth contraction in over four decades.
Pai said in an interview, “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 per cent of its output in the last two months.”
Higher shipments from India will contribute to global supplies expected to report a surplus of 3 million tons this year, as demand is hit by the virus outbreak. Inventories are near the highest in more than three years at the London Metal Exchange and this year prices have contracted about 11 per cent.
Billionaire Kumar Mangalam Birla’s Hindalco produced last year a massive 1.3 million tons of aluminium. It is mainly exported to South Korea, Malaysia, Taiwan, Thailand, the USA, Brazil and Japan.
India last year produced about 3.7 million tons of aluminium and consumed a similar quantity. Pai, who forecasted an annual increase in demand of 6 to 7 per cent in February, refused to offer a revised estimation as the complete effect of the pandemic has yet to be calculated.