This report profiles India’s metals and minerals industry, discussing market trends and outlook through 2014 and beyond. The report also highlights leading players in the sector including Hindalco Industries Ltd, Hindustan Zinc Ltd and Hindustan Copper Ltd.

The Indian metals and minerals sector is one of the important constituents of economic growth in India. The country has been a major global player in the sector in terms of manufacturing, consumption and trading in the last few years. India was ranked amongst the largest producers of aluminum and zinc in the world. The sector comprises of mining, production and trading companies. The big metal players dominate the industry and thus form a sort of oligopoly.

FY14 was a difficult year for the sector due to lower demand because of the country’s industrial slowdown. Global situation for metals and minerals was also adverse with spot prices of several metals going south. The value of India’s mineral production saw a decline as a result of the prevailing global situation.

However, the prices of metals grew in FY15 which together with a spurt in demand brought some relief to the sector. The index for production of basic metals recorded a five-year high in growth, while mining finally saw growth after three successive years of decline.

The outlook for the Indian metals and minerals sector looks stable in the near term because of a demand uptick and decline in inflation. Low per capita metal consumption, vast mineral resources and growing construction sector will act as drivers for the sector in the long term. Reforms and clearances in the mining sector will further add to the growth of this sector.

Key Points:

• During FY09-13, the metallic minerals segment grew at a CAGR of 16%. However, it recorded a steep y/y decline of 14% in FY14. The non-metallic minerals segment which was valued at INR 344bn grew at a CAGR of 18% during 2009-13, but also recorded a decline in FY14

• During 2008-13, the country’s production capacity of aluminium grew at a CAGR of 7.4% while the actual production grew at a CAGR of 6.8%. However, it recorded a steep decline of 12% y/y in FY14.

• During 2008-13, both existing production capacity and actual production of copper in the country remained stagnant. The production saw a spurt in FY13 followed by a steep decline in FY14.

• India's index of industrial production (IIP) saw a decline of 0.1% in FY14. Basic metals recorded a growth of only 0.3% while mining declined by 0.8% y/y. However, the industry saw a revival in FY15. Basic metals recorded a five-year high growth of 12% y/y while mining finally saw growth after three successive years of decline.