Analysts tracking the sector said that the price cut would benefit the power generation and transmission industry which consumes aluminium in its conductors and overhead lines. Transmission lines constitute 33% of the aluminium requirement in India while building and construction along with automobiles (bus bodies) account for 15% and 18% respectively. The rest of the aluminium goes into castings for radiator components among others, industry sources said. Packaging including laminated tubes is another major consumer of aluminium apart from aluminium products for household use, sources said.

Aluminium major Nalco and Hindalco have announced a price cut of Rs 1,000 per tonne following reduction in customs duty in the union budget. Though officials of both companies confirmed the price cut, they declined to formally comment on it.

Further, the appreciating rupee against the dollar has been keeping the pressure on the realisation prices of domestic aluminium manufacturers. Hindalco accounts for a 40% market share in the aluminium market followed by Nalco. Aluminium capacity in India is estimated at 8.5 lakh tonne of which Hindalco accounts for 3.45 lakh.