Aluminium consumption to reach 5.3 MT by 2021: Crisil

Domestic aluminium consumption is poised to grow by 9-11 per cent 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, 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.
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, an online marketplace catering to the non-ferrous metal (NFM) industry, unveiled the report on aluminium industry in India at the World Non-Ferrous Conference 2016 held here.

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.

The per capita electricity consumption in India was just 1,010 kWh in 2015, according to data from Central Electricity Authority, significantly lower than the world average of over 3,000 kWh and the lowest in BRICS.
According to the report, the secondary demand for aluminium consumption will ride on growth in automotive sector.

"Stringent vehicular emission norms leading to manufacturers reducing vehicle curb weight have come as a boon to aluminium industry, which is now finding ever greater applications in the sector.
"As consumer sentiment improves, and expectations of faster economic growth hold sway, automobile demand has a very favourable growth outlook for the next 5 years," the rating agency said.
Passenger vehicles penetration among households in India currently stands at a mere 9 per cent compared to the world average of over 60 per cent. 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.

"Traditionally, the Indian aluminium story is linked to the power and automotive sectors, which together take up nearly 60 per cent of the consumption pie. We see that other sectors such as consumer durables are also poised to grow at a very healthy rate," Mtlexs CEO Suneel Mardia said.