 "Aluminium makers seek doubling of import duty")
Battling cheap imports of aluminium metal from China and West Asia and plunge in LME (London Metal Exchange) prices, aluminium producers have demanded hike in import duty of the metal from five per cent to 10 per cent.
The demand for import duty hike was made under the banner of Aluminium Association of India.
"As an urgent measure on behalf of the domestic aluminium industries, we have urged the Government of India for an increase in import duty of aluminium metal to 10 per cent from the existing five per cent. Keeping in mind all the constraints, the urgent resolution of the issue will not only save the domestic aluminium industry but will also give a boost to the 'Make in India' campaign initiated by the Prime Minister", said Abhijit Pati, chief executive officer (aluminium), Vedanta Ltd.
The performance of the domestic players was also marred by sharp rise in coal prices that have seen spike of 24 per cent in the part three years. Besides, the domestic aluminium producers did not enjoy any government subsidy and were increasingly dependent on alumina imports.
Pati said, the operational viability of Vedanta's smelter (at Jharsuguda) was at stake due to heavy dependence on alumina imports, no local source of bauxite, increase in input costs and record fall in LME aluminium prices from $2200 to $1620 per tonne in the last one year.
"We are probably touching the lowest point in our aluminium operations and going by the current plight; it is a matter of time we will be forced to take drastic measures", said he.
Analysts, however, do not see a strong case for slashing duty on aluminium imports. "I believe that aluminium sector would be on second priority compared to steel, when it comes to providing duty protection. Steel industry is more severely impacted and it has wider implications for the economy and has accounted for a very significant increase in stress book for banks compared to the aluminium sector, where only limited people are impacted", said Giriraj Daga, portfolio manager at SKS Capital & Research Pvt Ltd.
Rise in aluminium imports are further delaying expansion plans of companies like Vedanta whose 1.25 mtpa aluminium SEZ (Special Economic Zone) is lying idle for want of raw material.
"In the last 10 years, approximately Rs 1.2 lakh crore has been invested in aluminium by private sector companies like Vedanta and Hindalco with a target of taking primary aluminium production from 2.1 mtpa to 4.1 mtpa by the year 2019 and today more than 750,000 livelihoods are directly or indirectly linked to our business", said Pati.
The demand for import duty hike was made under the banner of Aluminium Association of India.
"As an urgent measure on behalf of the domestic aluminium industries, we have urged the Government of India for an increase in import duty of aluminium metal to 10 per cent from the existing five per cent. Keeping in mind all the constraints, the urgent resolution of the issue will not only save the domestic aluminium industry but will also give a boost to the 'Make in India' campaign initiated by the Prime Minister", said Abhijit Pati, chief executive officer (aluminium), Vedanta Ltd.
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"With the surge of more than 1.5 million tonne per annum (mtpa) import of aluminium to the country, the share of domestic producers in the market has dropped drastically to 45 per cent in 2014-15 from 60 per cent in 2010-2011 due to rising imports from China and West Asian nations", he said.
The performance of the domestic players was also marred by sharp rise in coal prices that have seen spike of 24 per cent in the part three years. Besides, the domestic aluminium producers did not enjoy any government subsidy and were increasingly dependent on alumina imports.
Pati said, the operational viability of Vedanta's smelter (at Jharsuguda) was at stake due to heavy dependence on alumina imports, no local source of bauxite, increase in input costs and record fall in LME aluminium prices from $2200 to $1620 per tonne in the last one year.
"We are probably touching the lowest point in our aluminium operations and going by the current plight; it is a matter of time we will be forced to take drastic measures", said he.
Analysts, however, do not see a strong case for slashing duty on aluminium imports. "I believe that aluminium sector would be on second priority compared to steel, when it comes to providing duty protection. Steel industry is more severely impacted and it has wider implications for the economy and has accounted for a very significant increase in stress book for banks compared to the aluminium sector, where only limited people are impacted", said Giriraj Daga, portfolio manager at SKS Capital & Research Pvt Ltd.
Rise in aluminium imports are further delaying expansion plans of companies like Vedanta whose 1.25 mtpa aluminium SEZ (Special Economic Zone) is lying idle for want of raw material.
"In the last 10 years, approximately Rs 1.2 lakh crore has been invested in aluminium by private sector companies like Vedanta and Hindalco with a target of taking primary aluminium production from 2.1 mtpa to 4.1 mtpa by the year 2019 and today more than 750,000 livelihoods are directly or indirectly linked to our business", said Pati.