Beruflich Dokumente
Kultur Dokumente
We have analysed the domestic demand-supply situation and given an outlook on the profitability of Indian players. Further, we
have attempted to understand the aluminium extrusions industry, a downstream product.
The following section analyses global aluminium demand and prices and also provides an outlook on the same.
The extent of the downfall in global consumption would have been steeper but for the impressive growth in Chinese
consumption. China's positive growth in aluminium consumption is attributed to the phenomenal growth rate in China's
automobile production and increased spending in urban construction. China accounted for more than 40 per cent of the global
demand, and is estimated to have grown by 9-10 per cent in 2009.
Revival in demand from key end-user sectors since second half of 2009
After hitting rock bottom in early 2009, demand from end-user sectors in North America, Europe and Japan started recovering
from the second half of 2009. Stimulus packages announced by the respective governments in these regions also contributed
to overall revival in demand for aluminium.
The revival in end-user sectors across regions continued in January-April 2010 as well. Global production of aluminium grew by
about:blank 1/8
16-12-2010 about:blank
19.7 per cent (y-o-y) in the first four months of 2010, indicating revival in global demand.
During January-April 2010, production in China increased by over 50 per cent (y-o-y) as high-cost Chinese players re-started
their capacities following the rise in global prices of aluminium. While production in Europe was down by 4.5 per cent (y-o-y),
output in North America grew by 6.4 per cent in the said period. Other regions such as Asia (excluding China) and Latin America
witnessed double-digit growth rates.
about:blank 2/8
16-12-2010 about:blank
Automobile production, on a quarterly basis, improved consistently since the fourth quarter of 2008 as illustrated below:
Source: NBS
Subsidies, similar to those given to the automobile industry, were provided to the consumer durables sector. Accordingly,
production of consumer durables grew by 32 per cent during January-April 2010 over the corresponding period of last year.
about:blank 3/8
16-12-2010 about:blank
North America: Slow turnaround in end-use sectors
North America, being the epicentre of the global meltdown, was one of the worst hit regions. Output of sectors such as
automobiles, construction and consumer durables nosedived in 2009 with a steep fall in demand. Accordingly, the demand for
aluminium is estimated to have declined by 20-22 per cent in 2009.
The major consuming sectors of aluminium in the US are automobiles (37 per cent of the total aluminium consumption),
packaging (23 per cent) and construction (14 per cent). While these sectors were severely impacted through the first half of
2009, they recovered slowly in the second half.
As a proxy to the packaging sector, we have used the trend in revenues of retail and food services segments. Revenues of the
retail and food services segments fell by 6-7 per cent (y-o-y) in 2009.
As per the US census bureau, the number of starts in residential construction in 2009 slipped by about 38 per cent (y-o-y).
However, quarterly numbers viewed sequentially have shown a moderate rising trend. New residential construction starts in the
first quarter of 2010 moved up by 34 per cent y-o-y as compared with the first quarter of 2008.
about:blank 4/8
16-12-2010 about:blank
Automobile production in Europe region (Q1 2008 - Q4 2009)
Source: ACEA
about:blank 5/8
16-12-2010 about:blank
Source: JAMA
Similarly, sectors such as machinery and fabricated metals recovered at a slow pace. As per the monthly trend in Index of
Industrial Production (IIP) for these sectors, the recovery continued in the first three months of 2010 as well, albeit at a slow
pace.
about:blank 6/8
16-12-2010 about:blank
We believe global demand for aluminium will grow by 5-6 per cent in 2010 and further by 7-8 per cent in 2011. Accordingly,
consumption will rise from 35.7 million tonnes in 2009 to 37-38 million tonnes in 2010 and reach 40-41 million tonnes in 2011.
China is expected to register double-digit growth in the said period, while US, Europe and Japan will grow at a modest pace.
We expect the impact of stimulus across regions to cool down in the second half of 2010 and hence, lower the rate of growth in
global demand.
Although there has been robust growth in sales of new floor space and investments in fixed assets, the construction industry
(29 per cent of Chinese consumption) in China is expected to grow at 10-12 per cent. Amidst the tightening of credit for
construction purposes in China, we believe that growth in the sector will be moderate throughout the year.
Automobile production increased by over 40 per cent in 2009 as the government provided subsidies to consumers buying new
vehicles. The effect of this has continued through the first quarter of 2010, with production surging by over 65 per cent (y-o-y). By
the end of the year 2010, we expect automobile production to grow by 18-20 per cent due to the effect of higher base (in the third
and fourth quarters of 2009) combined with the cooling off of stimulus packages.
Production in the automobile sector (37 per cent of total demand) improved on a sequential basis. With growing demand for
automobiles in 2010 as compared with 2009, we expect production to rise by 5-7 per cent. Consumer spending is also likely to
be higher in 2010 as compared with 2009 and demand from the packaging segment will grow at a modest rate of 3-5 per cent
in 2010.
Europe and Japan: Marginal demand growth anticipated with slow recovery in end-user segments
In the case of Europe, recovery in end-user sectors has remained slow. Automobile production is expected to grow marginally,
while demand from the construction segment is likely to remain flattish. Overall, we expect demand to remain flat in 2010 and
grow marginally at 3-4 per cent in 2011.
Automobile production in Japan is likely to recover from 2009 levels and grow by 7-8 per cent in 2010 and 9-10 per cent in 2011.
Although the automobile sector is the major contributor to the consumption of aluminium, demand from other sectors such as
construction, machinery and fabricated metal is expected to remain flat. Hence, demand for aluminium in Japan is likely to rise
by 2-4 per cent in 2010 and 4-5 per cent in 2011.
about:blank 7/8
16-12-2010 about:blank
Disclaimer:
Industry Information Service is a Product of CRISIL Research, a Division of CRISIL Limited. CRISIL Research has taken due care
and caution in developing this Product based on the information in the public domain, but its adequacy or accuracy or
completeness is not guaranteed. CRISIL Research operates independently of, and does not have access to information obtained
by CRISIL's Ratings Division, which may in its regular course of operations obtain information that is confidential in nature. The
views of CRISIL Research expressed herein cannot be compared with the rating assigned or outlook developed on the companies
in the same Industry by the Ratings Division or any other Division or subsidiary of CRISIL Limited. CRISIL Research is not
responsible for any errors or omissions in the analysis/inferences/views or for the results obtained from the use of the Product.
CRISIL Limited has no financial liability whatsoever to the subscribers/users/transmitters/distributors of this Product. This Product
is for the information of the subscriber only and no part of this Product may be published/reproduced in any form without prior
written permission of CRISIL Research.
about:blank 8/8