Hindalco expects rise in exports as war disrupts aluminium supply

Mumbai : Hindalco Industries expects its aluminium exports to accelerate as the Gulf war has severely impacted producers of the commodity in the region.

Satish Pai, managing director, Hindalco, told ET the company would be shipping additional volumes to Japan, Korea, and Taiwan in the coming months.

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“We already export to these markets (Japan, Korea and Taiwan), but the macro situation is West Asia has given us headroom to export more to these regions,” said Pai.

Hindalco currently exports about a quarter of its total output. The six-nation Gulf Cooperation Council (GCC) accounts for around 8% of global primary aluminium production.

The Aditya Birla Group company also stands to benefit from the uptick in aluminium prices consequent to the supply disruption in West Asia.

Aluminium prices crossed the $3,500 per tonne mark last week amid the continued geopolitical challenges, with the average price for the current quarter close to $3,170 per tonne. This is sharply higher from around $2,830 per tonne in the December quarter.

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“With aluminium prices in the range of $3,400 $3,500, we are very well-placed,” Pai said.

In an exchange filing on Sunday, Hindalco also clarified that it hasn’t halted operations at its aluminium extrusions business.

A report said earlier in the day that the company has halted extruded aluminium production due to a shortage of gas.

Pai said production is “completely unhampered” and that most of the extrusion furnaces are dual-fired due to which the company has been able to switch to using furnace oil for firing up the furnaces.

Hindalco produces around 90,000 tonnes of aluminium extrusions each year out of its annual aluminium production of 1.35 million tonnes.

“The aluminium Extrusions segment constitutes a small portion of Hindalco’s production capacity, and the potential impact is currently limited to less than 0.1% of the Company’s overall operations,” Hindalco said in the exchange filing.