India’s primary aluminium producer Hindalco shifted its focus to the export market in Q1 as domestic demand slumped amid the COVID-19 pandemic. The company is currently exporting 80pc of its production, said Satish Pai, Managing Director of Hindalco Industries to Davis Index.
“We are currently exporting around 80pc of our total output to countries like Korea, the US, Malaysia, Brazil, Japan, while minimizing our inventory build-up and absorbing the plant’s fixed costs with a complete focus on the safety of the workforce and stability of operations,” said Pai.
The Indian government has recognized primary aluminium production as essential services, which allowed primary producers to continue production during the COVID-19-related lockdown in India. However, downstream industries remaining closed.
All of Hindalco’s four aluminium smelters and the Utkal alumina refinery (in Odisha) operated at near full capacity even during the national lockdown. Mining at the company’s captive coal and bauxite mines also continued at normal levels despite lockdown. Hindalco has restarted downstream operations at truncated capacities to align with market demand which is picking up slowly after the government eased restriction on industries. After the initial temporary shutdowns, the company-owned copper smelters have resumed and are now stabilising to reach optimal levels.
Among the company’s overseas operations, temporary or partial shutdowns were taken up at Novelis automotive plants in the US and Europe in response to shrinking customer demand or by government decree. Major US and German automakers are showing some positive signs as auto OEMs in these regions are restarting operations in a phased manner, said Pai.
In Q4 2020, Hindalco’s aluminium production rose by 2pc to 327,000mt from the prior year quarter.