Hindalco Industries Ltd, the largest aluminium manufacturer in India, has urged the government to place a limit on the import of low-cost semis, wire rods and scraps from China, South East Asia and the US. The company has quoted the rising share of inbound shipments in domestic demand as the reason.
Hindalco Industries Ltd Managing Director and Chief Executive Officer Satish Pai explained that the government should impose quantitative restrictions on imports in the near future. The government should then proceed to duty safeguards. Pai said that while quantitative restrictions will benefit in the short term, with the World Trade Organisation allowing it, it takes a minimum of six months for safeguards to be implemented.
The profit of copper and aluminium producers exceeded the double in the quarter ending June as the world’s fastest growing large economy revives, helped by the manufacturing and government’s infrastructure impetus. However, this has been offset by the 20 percent increase in aluminium imports for the same quarter. The imports included low-cost fake semis, wire rods from Asian countries, especially Malaysia.
A NITI Aayog report says that the aluminium industry in India is facing tough times because, among the largest producers such as Canada, Russia, Middle-East, Norway and China, it has the highest production costs. Power costs pushed the smelter metal’s cost by 73 per cent in the last 15 years. This is considerably high compared with the 64 per cent rise in aluminium price on the London Metal Exchange.
Pai says that the demand in the first quarter of this year is more compared to that in the previous financial year – more than expected. The construction, power and railways are the sectors demanding aluminium. Pai adds that Hindalco foresees the demand to grow more and the government should ensure the growth helps the domestic industry.
