India’s No. 1 Aluminium Producer Wants Curbs On Imports

India’s largest aluminium producer wants the government to cap the quantity of imports of low-cost semis, wire rods and scrap from China, southeast Asia and the U.S. as the share of inbound shipments in domestic demand is rising.“We have asked the government to impose quantitative restrictions on imports in the near term,” said Satish Pai, managing director and chief executive officer at Hindalco Industries Ltd. The government should move to duty safeguards eventually, he said, adding that while quantitative restrictions will be helpful in the short-term and are allowed under the World Trade Organization regime, safeguards will take at least six months.The profit of the copper and aluminium producer more than doubled in the quarter ended June as growth revives in the world’s fastest-growing large economy, aided by manufacturing and government’s infrastructure push. But aluminium imports also increased 20 percent in the first quarter. These largely included low-cost fake semis, wire rods from Asean nations, especially Malaysia..Billionaire Birla’s Hindalco Sees Profit Jump as Modi Fuels Boom.India’s aluminium industry is struggling to remain competitive because it has the highest production costs for aluminium among the largest producers including Canada, Russia, Middle East, Norway and China, according to a NITI Aayog report. The think-tank attributed it to higher power costs. That drove smelter metal’s cost 73 percent higher in the last 15 years compared with a 64 percent rise in the price of aluminium on the London Metal Exchange, the report said.Imports, according to Hindalco's conference call in May, cater to more than 50 percent of the market. That's a major concern for domestic producers, especially after the imposition of tariffs by the U.S. The Trump administration had imposed a 10 percent import duty on aluminium products for countries which were earlier exempted.Producers from China and Middle East are likely to divert their additional metal to the Indian market.Hindalco has asked the government to limit import based on the average of last three years of imported quantity, Pai said. The industry is also working with the government to impose BIS standards for aluminium scrap, which is going into wrong end-use, to ensure that only specific grade and quality aluminium enters the country, said Pai. Maximum scrap is imported from the U.S., he said.Aluminium DemandAluminium demand in the first quarter rose by 10 percent compared to a 9 percent growth in the previous financial year ended March.“It has been more than our expectations,” said Pai. The demand is coming from construction, power and railways, he said, adding that it’s not a short-term momentum ahead of an election year.“If it continues to be this robust at the end of the second quarter, we may upgrade our demand forecast,” Pai said, adding that Hindalco expects it to grow 10 percent in the ongoing financial year.“The government should ensure this growth benefits the domestic industry and is not consumed by imports.”.In A Year Of Growth Hindalco’s Biggest Fear Is Dumping

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India’s No. 1 Aluminium Producer Wants Curbs On Imports

Bloomberg Quint