Category Archives: India

China anode exports to India had a great increase

Written by Yuan JI

India increased purchases of anodes from China throughout the first quarter of this year, with 75kt in total. So far, India has already become the largest importer of China anodes, over Malaysia who was the largest importer in 2013. The volumes India took within first quarter 2014 were 80% of 2012 and 65% of 2013 yet, as this chart shows.

Anode chart

 

There are three principle aluminium producers in India, including Nalco, Vedanta and Hindalco. Throughout fiscal year 2014-2015, Hindalco has said they will increase output by 50% to 1Mt, mainly from their new facilities located in Madhya Pradesh and Odisha.

Nalco restarted 10 pots this week, meaning they will produce 410t more aluminium every month, and other pots will be restarted gradually. As for Vedanta, short supply of bauxite has limited aluminium production.

India’s domestic market shows aluminium demand rebounded to a certain degree, which encouraged aluminium smelters to raise production. At the same time, new capacity will consume more anodes in the coming months. Even if we only take Hindalco and Nalco’ s added production into account, India needs 275kt of extra anodes.

There doesn’t appear to be any change of strategy; the increased purchases of anodes seems to be a direct consequence of increased metal production.

 

India Economy Overview from this month’s AZ China India Report

Written by Paul Adkins

The weakening of the Indian rupee reflects the country’s high current account deficit and lower capital inflows, but Moody’s stated it might not significantly impact India’s foreign debt repayment capacity. The rating agency’s current rating for India is BAA3, the lowest stable investment-grade level. Fitch Rankings and Standard & Poor’s however maintain the outlook as negative. The Indian currency slumped to a record low of 61.21 rupees to the US dollar, a drop that had a cascading effect of an increase of between 15 to 20 per cent in the prices of petroleum products and edible oil. A global sell-off has made the rupee currency the worst-performing emerging Asian currency so far this year. The rupee’s relentless fall has almost dashed hopes for an interest rate cut at the Reserve Bank of India’s (RBI) next monetary policy review on July 30, inflationary pressures having increased. And despite efforts by the government to control gold imports, Indians continue to buy the metal.

Headline inflation during June 2013 rose to 4.86 per cent, driven by higher food prices, adding to the economic challenges facing the Indian government and reducing the odds of an early national election. The inflation data followed on the heels of a contraction in industrial output, a fall in exports and higher retail inflation (up at 9.87 per cent), suggesting that a recovery from the downturn is still far off. Inflation has been a major factor in the declining popularity of the Congress-led coalition government. A sharp moderation in price pressures in recent months had given the beleaguered government hope ahead of a string of state elections scheduled this year and the national election due by May 2014.
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Reforms in India’s power sector began gathering pace as a “pass through” of imported coal costs was allowed under modified Fuel Supply Agreements (FSAs). The sector still faces constraints in terms of gas availability and pricing, environment clearances, the state electricity boards’ financials and rising debtors. Overall power generation increased 5.7 per cent YoY in May 2013, as a result of growth in generation by coal and hydro based plants.
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India’s exports during June 2013 declined for the second consecutive month, falling by 4.6 per cent to US$ 23.79 billion as compared to the same month a year ago. Imports fell by 0.4 percent during the month to US$ 36.03 billion YoY. The trade deficit declined to US$ 12.25 billion in June 2013 from US$ 20.14 billion in the preceding month, albeit higher than the US$ 11.24 billion deficit YoY. Exports during 1Q2013-14 declined by 1.4 per cent to US$ 72.45 billion as compared to the same period a year ago, but imports rose by six per cent to US$ 122.64 billion. Given the rise in imports against exports, the trade deficit for the quarter widened to US$ 50.18 billion during the quarter from the US$ 42.22 billion level YoY.
India’s primary aluminium and aluminium items imports during May 2013 increased by almost 12.5 per cent over the April 2013 value to US$ 307.44 million.
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Passenger cars sales in India declined for the eighth straight month, dropping by 7.24 per cent for 1Q2012-13. Overall, the vehicle industry registered a drop in production of 4.73 per cent in June YoY, and overall domestic vehicle sales during 1Q2013-14 declined by 2.1per cent YoY.

Download a complimentary report from AZ China

Written by Paul Adkins

AZ China’s latest India Report, June 2013, focuses on what is happening in India’s economy and aluminium raw materials market.

Click the link to download the report.

India’s aluminium production falls short of predictions

Written by Paul Adkins

Taken from this month’s India Report released yesterday. Contact AZ China to read the full report.

India’s aluminium production increased by 3 per cent during fiscal 2012-13 to 1.72 million tons as against the 2011-12 total of 1.67 million tons. The level was below the projected target of 2.06 million tons, largely due to shortages of bauxite and coal at some of the smelters. Falling global prices also contributed to the situation. Total aluminium consumption in India during FY 2012-13, including use of scrap was 2.7 million tons, with aluminium metal imports totalling 1.32 million tons.

Indian Petroleum Coke Looking for Bidders

Written by Paul Adkins

The petroleum coke calcination industry in India is going through a difficult period. The Indian Oil Corporation (IOC) which has a monopoly on the production of anode grade green cokes, is finding it difficult to get bidders for the e-auctions it conducts. Calciners stayed away from bidding in the April 2013 e-auction which was actually held after the first week of May 2013.

The IOC bases its floor prices on delivered to India prices of Chinese GPCs. But the e-auctions are restricted to calciners located within the states in which the refineries are based, and the Chinese GPC prices are only used by port-based calciners, and are blended with far cheaper GPCs imported from elsewhere, particularly the USA.

More on the latest raw materials news and data for India in this month’s India Report. Contact enquiries@az-china.com to subscribe.

Indian GPC E-auctions Results

Written by Paul Adkins

Excerpted from our monthly India report, email enquiries@az-china.com for subscription details.

Indian Oil Corporation (IOC) conducted GPC e-auctions on 29 January 2013, and the results of which for three refineries are tabulated below. India Refinery

Abbreviations used: ICL – India Carbon Group; MGI – Maniyar Group of Industries; GIL – Graphite India Limited; PI – Premier Industries; KH – Krishna Hydrocarbons

Update on the India GPC e-auction

Written by Paul Adkins

A excerpt from this month’s AZ China India report:

Sales of GPC from the Indian Oil Corporation’s (IOC) Barauni, Bongaigaon, Guwahati, Digboi and Koyali refineries to eligible buyers having plants in the states where the refineries are located, were stopped on 28 July 2012, and all were notified that thereafter sales would only be through e-auction.

GPC buyers were also notified that they had to register under a specific procedure for the e-auctions by 16 August 2012. A court case filed by Maniyar Group, which has several calciners in Bihar and Assam states, is still ongoing. The request made to IOC by Rain-CII to have the auction on a global basis was ignored.

Then on 18 August the IOC went a step further and set floor prices for the e-auctions at levels substantially above those at which GPCs were last sold. The first e-auction has been scheduled for 24 August 2012.

During the period between these two developments the price bids for the NALCO CPC tender opened on 13 August 2012, and surprisingly Petro Carbon & Chemicals from Haldia ranked first, and was entitled to an order equivalent to 50 per cent of the tendered quantity of 127,350 tons.

For more info on what’s going on in India, contact us as enquiries@az-china.com.

IOC pushing ahead with auction system

Written by Paul Adkins

India’s biggest oil company, IOC, is pushing ahead with their plans to introduce an auction system for the sale of their petroleum coke.

The company recently released some bidders’ rules, which include a 5% initial fee, as well as rules as to the quantity and refinery source that bidders can choose from. Floor prices (reserve prices) will be in place for all coke parcels. For those interested, we have a copy of the rules. Contact us for a copy.

The auction will be run by a third-party company called MSTC.

Auctioning pet coke is a brave move. India isn’t exactly a highly liquid market, at least in terms of the number of bidders - or potential bidders. Buyers have long complained about the slowness of the oil companies to respond to market conditions. Witness the amount of calcined coke exported from China to India - sometimes by Indian calcining companies.

An auction system removes the chance of any relationship-building, and it makes me wonder if IOC were worried about getting the best price for their coke. But the law of unintended consequences is likely to apply here. It would be foolish to think that buyers would simply lay down and accept this new system without a fight. We understand at least one calcining company has lodged an appeal with the government.

For more information on what’s going on in the Indian pet coke market, or the primary aluminium industry there, make sure you are subscribed to our “India Report”, which comes out each month.

The Sino-Indian Water Divide

Written by Paul Adkins

This article, from the Project syndicate in India, discusses what is probably the most sensitive and dangerous obstacle to China’s economic growth in future years, water. Although this article is written from an Indian perspective, it gives a good hint at what might lie ahead.

As China and India gain economic heft, they are drawing ever more international attention at the time of an ongoing global shift of power to Asia. Their underlying strategic dissonance and rivalry, however, usually attracts less notice.
As its power grows, China seems determined to choke off Asian competitors, a tendency reflected in its hardening stance toward India. This includes aggressive patrolling of the disputed Himalayan frontier by the People’s Liberation Army, many violations of the line of control separating the two giants, new assertiveness concerning India’s northeastern Arunachal Pradesh state – which China claims as its own – and vituperative attacks on India in the state-controlled Chinese media.
The issues that divide India and China, however, extend beyond territorial disputes. Water is becoming a key security issue in Sino-Indian relations and a potential source of enduring discord.
China and India already are water-stressed economies. The spread of irrigated farming and water-intensive industries, together with the demands of a rising middle class, have led to a severe struggle for more water. Indeed, both countries have entered an era of perennial water scarcity, which before long is likely to equal, in terms of per capita availability, the water shortages found in the Middle East.
Rapid economic growth could slow in the face of acute scarcity if demand for water continues to grow at its current frantic pace, turning China and India – both food-exporting countries – into major importers, a development that would accentuate the global food crisis.
Even though India has more arable land than China – 160.5 million hectares compared to 137.1 million hectares – Tibet is the source of most major Indian rivers. The Tibetan plateau’s vast glaciers, huge underground springs and high altitude make Tibet the world’s largest freshwater repository after the polar icecaps. Indeed, all of Asia’s major rivers, except the Ganges, originate in the Tibetan plateau. Even the Ganges’ two main tributaries flow in from Tibet.
But China is now pursuing major inter-basin and inter-river water transfer projects on the Tibetan plateau, which threatens to diminish international-river flows into India and other co-riparian states. Before such hydro-engineering projects sow the seeds of water conflict, China ought to build institutionalized, cooperative river-basin arrangements with downstream states.
Upstream dams, barrages, canals, and irrigation systems can help fashion water into a political weapon that can be wielded overtly in a war, or subtly in peacetime to signal dissatisfaction with a co-riparian state. Even denial of hydrological data in a critically important season can amount to the use of water as a political tool. Flash floods in recent years in two Indian frontier states – Himachal Pradesh and Arunachal Pradesh – served as an ugly reminder of China’s lack of information-sharing on its upstream projects. Such leverage could in turn prompt a downstream state to build up its military capacity to help counterbalance this disadvantage.
In fact, China has been damming most international rivers flowing out of Tibet, whose fragile ecosystem is already threatened by global warming. The only rivers on which no hydro-engineering works have been undertaken so far are the Indus, whose basin falls mostly in India and Pakistan, and the Salween, which flows into Burma and Thailand. Local authorities in Yunnan province, however, are considering damming the Salween in the quake-prone upstream region.
India’s government has been pressing China for transparency, greater hydrological data-sharing, and a commitment not to redirect the natural flow of any river or diminish cross-border water flows. But even a joint expert-level mechanism – set up in 2007 merely for “interaction and cooperation” on hydrological data – has proven of little value.
The most dangerous idea China is contemplating is the northward rerouting of the Brahmaputra river, known as Yarlung Tsangpo to Tibetans, but which China has renamed Yaluzangbu. It is the world’s highest river, and also one of the fastest-flowing. Diversion of the Brahmaputra’s water to the parched Yellow river is an idea that China does not discuss in public, because the project implies environmental devastation of India’s northeastern plains and eastern Bangladesh, and would thus be akin to a declaration of water war on India and Bangladesh.
Nevertheless, an officially blessed book published in 2005, Tibet’s Waters Will Save China , openly championed the northward rerouting of the Brahmaputra. Moreover, the Chinese desire to divert the Brahmaputra by employing “peaceful nuclear explosions” to build an underground tunnel through the Himalayas found expression in the international negotiations in Geneva in the mid-1990s on the Comprehensive Test Ban Treaty (CTBT). China sought unsuccessfully to exempt PNEs from the CTBT, a pact still not in force.
The issue now is not whether China will reroute the Brahmaputra, but when. Once authorities complete their feasibility studies and the diversion scheme begins, the project will be presented as a fait accompli . China already has identified the bend where the Brahmaputra forms the world’s longest and deepest canyon – just before entering India – as the diversion point.
China’s ambitions to channel Tibetan waters northward have been whetted by two factors: the completion of the Three Gorges Dam, which, despite the project’s glaring environmental pitfalls, China trumpets as the greatest engineering feat since the construction of the Great Wall; and the power of President Hu Jintao, whose background fuses two key elements – water and Tibet. Hu, a hydrologist by training, owes his swift rise in the Communist Party hierarchy to the brutal martial-law crackdown he carried out in Tibet in 1989.
China’s hydro-engineering projects and plans are a reminder that Tibet is at the heart of the India-China divide. Tibet ceased to be a political buffer when China annexed it nearly six decades ago. But Tibet can still become a political bridge between China and India. For that to happen, water has to become a source of cooperation, not conflict.

New smelter mooted for India

Written by Paul Adkins

State-run National Aluminium Company Limited (Nalco) on Wednesday announced its plans to set up mines and refinery project in the Andhra Pradesh and a second aluminium smelter in Orissa.

According to an official statement issued here by the Ministry of Mines, Nalco plans to spend $1.2 billion in the Andhra Pradesh project that would be located in Visakhapatnam district and Rs. 16,350 crore ($3.5 billion) in Orissa that would be located in Brajarajnagar in Jharsuguda distrct for the smelter and a captive power plant. The proposed aluminium smelter will have five lakh tonnes (500,000 tonnes) a year capacity and will be completed in two phases.

Nalco has also signed a memorandum of understanding (MoU) with the Orissa Government for setting up an aluminium park at Angul in a 50:50 joint venture with the State’s Industrial Infrastructure Development Corporation (IDCO) at an investment of Rs. 75 crore.

The proposed aluminium park is expected to promote downstream and ancillary industries that would encourage value addition within the periphery of the plant.