The India aluminum paradox

India’s Aluminum Export Boom

The answer lies in the particular conditions of the aluminum industry and trade in India, including the specific needs of domestic aluminum users. First, it’s important to note that India’s aluminum exports have been growing prodigiously for several years—to the entire world and not only the U.S. They leapt by nearly 16% during the second quarter of this year and by over one-third in 2018—increasing by 440,000 metric tons to reach 1.66 million metric tons. From 2015 to 2017, India’s aluminum producers’ exports rose by a whopping 83%.

Indian aluminum represents only 1.25% of U.S. imports of the metal, but six percent of India’s exports. South Korea, Turkey, Mexico, Italy, and Japan are India’s other major aluminum customers, together with the U.S. buying 65% of India’s exports.

India was able to increase its exports of aluminum thanks to two unusual conditions. First, there existed a large surplus in domestic aluminum stockpiles, and, second, global aluminum supplies became scarcer thanks to the turmoil caused by the Trump tariffs as well as sanctions on aluminum producers such as Rusal.

At the same time, India’s imports of aluminum also grew mightily. In 2018, India’s aluminum imports, including scrap, grew to nearly two-million metric tons, continuing a growth trend of 12% per year on average since 2011. Imports claimed a 54% share of the country’s total aluminum consumption last year.