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The World Bank expects the global growth rate to decline from an estimated 2.6% in 2023 to 2.4% this year; this would be the slowest rate of expansion since 2009 (excluding a crisis year). However, the same institution continues to see Indian growth remaining firm at 6.3% in 2024.

Foreign investors have endorsed the Indian growth story: the country’s net foreign direct investment hit a 21-month peak in October last year in reaching US$ 5.9 billion, as per Reserve Bank of India data. Also, foreign portfolio investments totalled US$ 28 billion in 2023, their highest level since 2017.

Economists expect the Indian budget, due on January 31, to show a slowdown in government spending and an increased focus on fiscal discipline. Yet forecasts suggest that, by 2027, India will be the world’s third-largest economy, with a GDP exceeding US$ 5 trillion. Positive trends are anticipated in services and manufacturing, particularly in education, healthcare and IT, benefiting the real estate sector.

In the final quarter of 2023, copper scrap availability was healthy in India and substantial volumes were exported. The good availability has extended into the first quarter of 2024 but tightness in supply if foreseen for the April-June quarter.

As for aluminium, the crisis in the Red Sea is having a ripple effect on freight rates, with delayed arrivals of imports adding to the woes of India’s recyclers. Also affected by the crisis is the availability of scrap, which has become more expensive at a time when refined metal prices have headed lower. Therefore, it has become more commercially lucrative to raise the share of primary metal in the raw material mix.

Domestic demand is robust for flat rolled aluminium products owing to heavy spending by the government and private sector in the building and construction segment. Meanwhile, strong aluminium alloy demand is supported by healthy order books for the automobile and aviation sectors, with the price at the time of writing having risen to US$ 2350 per tonne delivered to customers in India.

Anirudha Agrawal

Manaksia Aluminium CO LTD. (IND), Guest contributor


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