Aluminium Industry Analysis

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Aftermath the global financial meltdown, worldwide the aluminium industries is the major causalities of the disastrous outcome. The LME price (London Metal Exchange), which is the primary indicator of this commodity exchange crashed from a price range of plus $ 2600 per ton to $ 1540 as on date. Over the last 7-8 years, the prices, supplies and demand are highly volatiles sending a very confusing and alarming signal to the aluminium producers. As a result of this unpredictable business environment, major aluminium producers have almost cut down 50 % of their production capacity and closed down many smelters in Europe. To demonstrate the testimony of the volatility and uncertainties, some of the global perspectives of aluminium are illustrated…show more content…
Technologies and speed: Over the decades of research and development, the technologies for aluminium industries are fast changing in terms of energy consumption, efficiencies and downstream products. Disrupting technologies in the field of composite carbon fibres, fibre reinforced plastics and other composites are slowly taking over as substitute for aluminium. All the optimistic demand forecasts came out to be opposite of the figures predicted. ii. Economic and financial changes: The manufacturing and the epicentre of the global hub is shifted to China. More than 50 % of the aluminium production and consumptions are happening in China. Because of the Chinese competitive advantages, none of the western producers are able to match to the price and the economy of scale. Moreover, there are hardly any demand in the developed and matured market like Europe and the USA. The new aluminium hub is today hugely influenced by the demands driven by the Asian markets. This has created a huge turbulence and imbalance in the global aluminium production, sales and…show more content…
Information intensification: The cluster of big data mining in the Asia Pacific region has added advantages to the Chinese producers and they are able to take smart business decisions ahead of the western markets and deliberately pushing the products through the predatory pricing policy and taking advantage of arbitrage in Shanghai Exchange. iv. Knowledge obsolescence: The old saying goes like 'knowledge and information is power.' In today's highly informed world, every second, the knowledge bank of the managers goes obsolete without continuous updating. The experience and the maturity gained over the years are stale without appropriate alignment with the changing environment and calibrating the knowledge ever moment with reality. v. Climate change: Aluminium industries are highly energy driven and it uses 40 % of its cost towards the energy bill. The recent global consensus on climate change, green energy focus, carbon footprints, carbon development mechanism, and sustainability models are the major roadblocks for the growth of aluminium industries in India as well as in other parts of the world. The regulatory imposition from the constitutional authority on emissions, embargo on thermal generation from coal, capping on usage of fossil based fuels are the leading causes of ambiguity and uncertainties for the aluminium

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