NEW DELHI: Global tailwinds such as the US sanctions on China have helped India raise its exports to the global market, driving up prices locally, feel analysts.
The US sanctions had helped exports rise in 2018-19 and companies expect this trend to continue in 2019-20. India’s aluminum export to the US in 2018 increased by 58 per cent to $221 million, according to the independent Congressional Research Service (CRS) report in April this year.
“The demand for Indian aluminium remains firm from the US market due to sanctions on other importers like China. Aluminium-makers from Nalco, Hindalco, Vedanta to us have all increased production of the metal. This has impacted prices,” said BD Garg, executive director, Jindal Aluminum .
“Domestic prices, which are presently at Rs 146 per 10 kg, are likely to go up to Rs 150-155 per 10 kg by June, looking at the export demand,” said Garg. MCX aluminium is expected to trade positively with good support at Rs 145 per 10 kg and intermediate support at Rs 146.30 per 10 kg. “Buy on dips is advised targeting higher resistance at Rs 149.10,” said Navneet Damani, vice-president, commodity research, Motilal Oswal Financial Services. Damani said industrial activity is expected to pick up with the US and China putting an end to the trade war. However, a drop in global production is going to support prices, he said.
On LME, aluminum increased by 3 per cent to $1,825 per tonne from January till date. In the same period on the MCX, the metal prices increased by 3 per cent to Rs 147 per 10 kg. “We are expecting appreciation in aluminum prices for the next one to two months with increase in domestic production of electronic and micro-electronic components. Prices can touch Rs 160-165 per 10 kg,” said Anuj Gupta, deputy vice-president of commodity research at Angel Broking. Traders said demand was also coming from car manufacturers who were increasingly substituting steel with aluminium as a base material.
Source: economictimes.indiatimes.com