New Delhi [India] May 7 : Indian primary aluminium manufacturers are projected to remain in a healthy profitable state for this fiscal year, countering global trade headwinds, including the recent hike in US tariffs on aluminium imports, according to a report by Crisil Ratings.
The US raised the tariff on aluminium imports to 25 per cent across all countries, which increased India's aluminium tariff from 2.55 per cent to 25 per cent. But, it had a limited impact on India's aluminium exports directly as the US accounts for less than 5 per cent of India's total aluminium exports, limiting the immediate consequences of the tariff increase.
"Strong operating efficiencies, low-cost operations, and favourable global demand-supply balance will keep margins over a solid USD 650 per tonne," Crisil ratings said.
With nearly 50 per cent of India's annual primary aluminium output being exported to international markets, the report says "Indian producers may face heightened competition in their regular overseas markets, as key exporters to the US divert supplies to other geographies."
"While global demand growth may moderate this fiscal, surplus will still be limited. This is because the global aluminium market faces limited risk of oversupply, as smelters in major aluminium-producing countries, including India, have consistently operated at utilisation rates well above 90% per cent" said Ankit Hakhu, Director, Crisil Ratings.
Crisil Ratings indicates that the risk of price volatility could impact profit margins for domestic primary aluminium players. "Realisations for domestic producers are linked to London Metal Exchange (LME) prices," the report states.
Due to the uncertainties regarding global macroeconomic growth post the tariff announcements by the US, the aluminium prices on LME has witnessed a lot of volatility and they moderated to about USD 2,350 per tonne in April 2025 from a peak of USD 2,700 per tonne in March 2025.
Despite this volatility, Crisil anticipates that LME prices will remain above USD 2,300 per tonne on average for the fiscal year, providing a degree of stability for Indian producers, said Ankush Tyagi, Associate Director, Crisil Ratings.
Disclaimer: This post has been auto-published from an agency feed without any modifications to the text and has not been reviewed by an editor