Hindalco Industries Ltd announces Business Outlook

Hindalco Industries Ltd has announced the following Outlook for its business.

Industry Outlook:

Aluminium
Global Aluminium consumption is estimated to have grown by 7.2% during CY06. The Key contributor to this growth has been the Asian region powered mainly by China which is estimated to have grown by 20.6%. Going forward the demand is expected to be strong especially from China and India.

Rapidly increasing Semi-fabrication capacity in China is adding to the primary metal demand. The Semi-fabrication production in China has grown by 25.5% in CY06. The Chinese consumption growth is driven mainly by higher investment in infrastructure as well as growth in the Automobile Industries. The Chinese Aluminium consumption is anticipated to grow by a phenomenal 20.8% during CY07. The rest of Asia is also expected to witness good demand during 2007.

Copper
The Smelter production recorded a strong growth in CY2006, despite the tight concentrates market and low Tc/Rcs. Expansions to underlying capacity continued to lift output, and high concentrate stocks enabled smelters to cover the shortfall in new mine production. Yet another output surge in CY2008 is expected as new capacity is to go on stream. This will be the peak year for production growth. However, despite a strong growth in capacity, with mine output continuing to fall short of smelter requirement, actual output will be constrained by concentrate availability.

Refined output increased by an estimated 6.4% last year as there was underlying growth in capacity, particularly in China. A robust growth is forecast for CY2008 with capacity increases.

Company Outlook
The Company has been continuously improving its performance. It is leveraging its fundamental strengths to deliver shareholder value and this is an ongoing priority. LME will drive the performance of aluminium business whereas it is a pass through for copper business. Going forward the biggest challenge would be to maintain high levels of performance once the aluminium price at the LME starts moving down.

Source : Equity Bulls

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