Following China and the United States’ sanctions, India’s aluminium imports have reportedly recorded a year-on-year rise by 24 per cent during April-October 2018. According to executives, the volume of inbound shipments may grow further and cause more distress to the domestic industry. Scrap imports have also increased during this period by 22 per cent, after the US imposed 10 per cent duty on aluminium and China slapped 25 per cent import duty on aluminium scrap from the US.
The industry expects further increase in scrap imports as well, as China has classified aluminium scrap as restricted import from July 2019 and plans to ban all scrap dumping by 2020. India, however, has no standards to restrict scrap imports, pointed out Vedanta CEO (aluminium and power) Ajay Kumar Dixit.
Mr. Dixit said India generates sufficient domestic scrap to replace the scrap imports. According to him, India’s dependence on scrap imports is totally non-essential. The country has significant presence of primary aluminium capacity and potential to generate sufficient amount of scrap domestically. So, the import should be restricted to encourage domestic aluminium industry and recycling of indigenous scrap.
Dixit further said low prices and rising costs should be blamed for adding further woes to the aluminium industry. Aluminium prices on the London Metal Exchange fell 23 per cent in the past eight months to US$1,800 per tonne from US$2,290 per tonne in May 2018. Production costs for the overall industry also increased by 30 per cent in the past three-four years because of growing input costs, coal cess, electricity duty and logistics costs.
In a letter to finance minister Arun Jaitley, the Aluminium Association of India said, “The aluminium industry is going through a challenging phase and is under immense threat due to rising imports, declining domestic market share, increasing production and logistics costs. Moreover, the recent global developments leading to surge in aluminium imports have affected the sustainability of Indian aluminium industry.”
For this reason, the association has already sought tariff barriers on imports. It has demanded a 10% import duty on both aluminium scrap and primary aluminium metal.
Responses
