India's Recycled Aluminium Demand Expected to Surge

India's Recycled Aluminium Demand Expected to Surge

by Biman Mukherji / INDIA

18th January 2006

MUMBAI - Growing demand for consumer goods and automobiles in India is likely to give a huge boost to the consumption of recycled aluminium, industry officials said.

Subramaniam Arumugam, marketing director of US aluminium casting firm Almex Corp., told Reuters that demand for recycled aluminium was bound to shoot up in India because it was much cheaper than the primary metal and also environmentally friendly.

"It will be used for everything from cans, scooters to construction. It can even be used in specialised alloys for making automobile to aerospace parts," he said.

Yet India was lagging far behind developed countries, where usage of scrap aluminium is nearly 10 times that of primary aluminium because of energy savings, he said.

"Here, in India, it is still a very unorganised industry. Most of the recycled aluminium is made by small firms. In another three to four years, the secondary aluminium industry will take off in a big way," Arumugam said.

Industry officials estimated the availability of recycled aluminium in the Indian market at about 600,000 tonnes annually.

India's annual output of primary aluminium, or new metal made from the mineral bauxite, is estimated at more than 800,000 tonnes.

"If you see India's per-capita consumption of aluminium, it is 0.6 kilograms per person. Whereas in developed markets the consumption level is around 20 kilograms," said S.K. Banerjee, former managing director of India's second-largest aluminium producer, NALCO "India obviously has a tremendous (potential) market for recycled aluminium," he added.

Banerjee said recycled aluminium was sure to shadow growth in primary aluminium usage, which is projected to more than double in the next five years.

Industry officials said recycled aluminium had a huge competitive advantage as the cost of manufacturing was only 5 percent of primary aluminium.

"The application of such recycled aluminium can be in everything from automobile parts to other sophisticated devices," an industry official said. "But I expect tertiary firms rather than the big primary producers to take more to this product."

He said while big aluminium firms such as NALCO already had integrated complexes for processing bauxite into aluminium, medium-sized firms usually did not and therefore would probably opt for recycled metal instead.

Story by Biman Mukherji

REUTERS NEWS SERVICE