ASMA vehemently opposes primary producers’ appeal for restrictions on Chinese aluminium scrap import

ASMA (Aluminium Secondary Manufacturers Association) representing about 3500 small and medium industrial units spread all over India, engaged in the manufacture of various downstream aluminium products, such as extrusion, flat rolled products, utensils, cable and conductors etc. has reacted strongly against the primary producers’ insistence on putting restrictions on Chinese aluminium import.

Reacting a news story titled “Companies ask Government to restrict Chinese aluminium imports” circulated in media, the association claimed in a mail to AlCircle that facts in the story are far from reality and give a one sided story.  According to Anil Agarwal, the spokesperson from the Aluminium Secondary Manufacturers Association, this represents the opinion of the big industrial houses like Hindalco group and Vedanta group, engaged in the manufacture of primary aluminium metal. The appeal, according to them ignores the plight of 3500 small and medium industries in India.

According to the Association primary producers charge the downstream manufacturers exorbitant prices on the metal manufactured by them. The primary producers have approached Director General of Safeguards, Director General of Anti-Dumping Duty, Ministry of Mines and Commerce repeatedly for imposing of minimum import price.  However, the opposition by ASMA and all the units, at all levels has prevented the unjustified tariffs from implementation. There has been a fresh attempt by the primary producers to get the Government policies remoulded to favour them.  But, ASMA said they would continue to oppose such developments.

According to them, there has been a slight increase in import of scrap and alloyed ingots but import of primary metal which is being manufactured by the primary producers have reduced considerably. The increase in terms of value is because of the increase in international LME price by US$ 600 to $750 per tonne in the last one year. The claim that the entire scrap is being dumped into Indian market by China, according to them is not supported by facts as China is only exporting finished aluminium products in Indian market, at a large scale.

Out of the total imports, about 2.30 lakhs tons of alloyed ingots have been imported to India from the ASEAN countries under FTA agreement because such alloyed ingots are not supplied and marketed by the domestic primary producers.  According to the association, about 80-90% of the imported aluminium scrap is used to convert into the alloy ingot required by automobile industries in the country and without scrap there is no feasibility of manufacturing and supplying the same on the competitive price to the automobile industries.  The sourcing of the entire aluminium alloys consumed by automobile industries is based on scrap import. Imposing any kind of restrictions on the import of scrap will result in replacement of the same by the import of alloyed ingots from ASEAN countries under FTA agreement, free of import duty. This will be a net loss to the national exchequer also cause job loss in the domestic processing industry.

The cost of production of the Indian primary producers is one of the lowest in the world as claimed by them.  There may be increase of about 10% in the cost of production in the year 2018 even then they would be earning profit margins because of higher aluminium prices in the international market.  They, according to ASMA, are selling 2.1 Million ton aluminium in the domestic market at 14% higher price from the international prices. Primary producers, according to them are enjoying Government protection in the form of import duty and other expenditure such as inland haulage, custom clearance etc.

ASMA cited a separate presentation given to the Department of DIPP, Ministry of Commerce, along with the primary producers held on 21st June while making their allegations.  They urged the government and the Indian media to highlight the plight of the small and medium aluminium industries and prevent duties on the import of aluminium scrap.