MI ANALYSIS: Indian primary aluminium production up 11% in Q2 07

India’s national production of primary aluminium was 303,400t in the second quarter of 2007, representing year-on-year growth of 11.0%, according to the latest figures from the country’s ministry of mines. The country’s production in June itself was equivalent to an annualised 1.232 million tonnes, a fresh record. The growth rate in the country’s aluminium production has slowed in recent months from over 20% in the second half of 2006 but it is still one of the fastest growth rates anywhere outside China. Total non-China growth was just 2.9% in the first half of this year, by comparison. All of the country’s producers have expansion plans—brownfield in the case of state-owned Nalco and largely greenfield in the case of Hindalco and Vedanta. But right now, production growth is largely coming from Hindalco’s second-phase expansion of its Hirakud smelter from 100,000tpy to 143,000tpy. In its latest quarterly update the company said the expansion is well on track for completion in December of this year. Hindalco’s group production was 38,579t in June, equivalent to an annualised 469,000t. Cumulative production of 116,093t in Q2 was up by 8.3% year-on-year, that growth rate accelerating from an incremental 1.1% in the year-earlier period. Balco, which is jointly owned by the government and Vedanta, completed its expansion from 100,000tpy to 345,000tpy late last year and the new smelter has been operating at consistent levels for the last three quarters, Vedanta said in its more recently quarterly update. Indeed, annualised production in June itself was a new record 364,000t. The same situation holds true of Nalco, which has a current capacity of 345,000tpy but is now consistently producing above that level—June’s output was an annualised 361,000t in June. Growth rates should moderate over the rest of this year, reflecting a hiatus between the last major round of expansion activity and the next, which will kick off again next year with Nalco’s planned lift in capacity to 460,000tpy.