Aluminium industry worried over cheaper Chinese imports

The domestic aluminium consumption is poised to take off in a big way over the next few years. But the industry is having sleepless nights over cheaper Chinese imports, which are hurting its chances to tap the growing demand.

There is clearly an attempt on its part to protect its turf, and the wish-list includes imposition of “safeguard duties” on the imports and prohibiting exports of bauxite ore. Industry representatives said the domestic aluminium sector is going that extra mile by gearing up to add capacities to meet future demand.

“We have requested the government to see to it that the landed cost of the Chinese aluminium products is not less than the products made in the domestic market,” K S S Murthy, general secretary of the Aluminium Association of India (AAI), said.

China currently dominates the space with a sizeable 19.8 million tonne per annum out of the total global production of about 40 million tonne. However, when it comes to bauxite, the ore from which aluminium is processed, India is on the top five list with deposits of about 1,400 million tonne.

“Major economies across the globe are suffering because of cheaper Chinese imports and many of these nations have realised the need to impose safeguard duties to protect their respective industries,” Murthy said.

Going forward, the industry is working on plans to pump in close to Rs1.2 lakh crore to take the total domestic capacity to about 5 mtpa by 2017 from about 1.8 mtpa currently and 10 million tonnes by 2020.

According to the industry body, most of the aluminium demand is expected to come from sectors like passenger cars, packaging, two-wheelers, roads, ports, railway, airports, telecom and power generation.

“The government has to make regulations like in Japan and Germany that insist on fuel mileage of automobiles and stringent emission norms that make automobile manufacturers step up aluminium consumption,” Murthy said.