KOLKATA: A rise in primary aluminium exports has helped manufacturers of the commodity tackle a sharp decline in domestic demand in the wake of the COVID-19 pandemic, a report said.
Primary aluminium exports rose by 50 per cent in the first quarter of the current fiscal and constituted over 75 per cent of the total production of the commodity, Crisil Research said in its report.
Among the destinations, the exports have surged to countries that have had early success in containing the pandemic, such as China, South Korea and Malaysia, it said.
According to the report, exports to China rose a massive 4,500 per cent on-year over the low base.
"On the domestic front, primary aluminium demand is estimated to have plunged 45-50 per cent on-year in the first quarter following the nationwide and local lockdowns to contain the COVID-19 pandemic," the report said.
But, India's primary aluminium production fell just 5 per cent during the quarter due to the export salve.
Exports of the metal started rising from the second half of the fiscal 2020 when China imposed a ban on its scrap imports.
"Following the ban, excess scrap in global markets is being redirected to India, leading to a surge in scrap imports and increased scrap blending, further straining the weak domestic demand for primary aluminium," the Crisil Research said.
As the economic activities pick up in the second half of the fiscal, demand for primary aluminium is expected to improve, it added.