Aluminium foil prices yet to gain momentum

The aluminium foil (9 microne low grade) prices have jumped Rs 100 to Rs 19,500 a quintal in the domestic physical market. But, the current price have declined by 5-6 per cent in last two years.

The prices of all low grade aluminium foils are ranging between Rs 19,000 - Rs 21,000 per quintal. Medium grade foils are quoted at Rs 15,000-17,500 per quintal.

"Despite a healthy projected growth, aluminium foil industry is passing through shading phase now. Prices of aluminium have gone up dramatically in the international market and crossed the psychological barrier of $1,900 per tonne, a rise of approximately 50 per cent, but it hardly left any significant mark on aluminium foil industry to follow suit," said Ravi Haldipur, chief of marketing (pharmaceutical foil), India Foils Ltd.

The price of aluminium foil is determined by the movement in aluminium prices coupled with demand-supply situation of foilstocks that is the only raw material for producing foils.

"Despite uninterrupted price rise in aluminium and foilstocks, aluminium foil prices have declined regularly as the large chunk of margins rests with the downstream processors," Ravi added.

All primary rollers including India Foils, Hindalco, Indal, Annapoorna Foils are satisfied with unsustainable margins as demand from non core user is increasing.

"As far as pharma sector goes, the potential lies only with tablet and capsules laminating and coating which is not a major part of the the entire industry. Therefore, poly film foils which are used for tablet lamination and heat seal plus foils which is used for coating are not much in demand as now there is no use of aluminium foil packaging," he said and added that the demand from pharmaceutical industry is growing not rapidly but steadily.

The food packaging industry (the house foil segment) is picking up well and the projected growth in the industry is approximately 25-30 per cent.