Aluminium Import Duty Hikes to 7.5%: Jaitley

Gold Silver Reports – Metal sector bleeding from rising production cost, weak demand and cheap import from China are upset at the Budget as the plea from Aluminum Industries to increase import tariff to double from 5% to 10% to support the local players have gone unheard.

India, worlds second largest producer after china, could only benefit when global market starts uplifted, Hence support would be seek from government. Government of India has mounted the custom tariff from 5% to 7.5% in respect to the industries demand.

Imposing the duty hike to reduce import may help to sectors like power, transport and construction. The rise was not meeting the expectation yet the industry has welcomed the decision. Aluminum at MCX has recovered from day’s low. In equity stocks like Tata Steel, JSW Steel, and NMDC were also trading in green after the hike.

Excess availability of the metal as a result of surplus production, particularly in China, has dragged international aluminium prices to its present low levels. Price of aluminium traded in the London Metal Exchange (LME) fell to its six year low of $ 1428/MT in December 2015, before regaining some stability between $ 1480 –1530/MT in January –February 2016.

In the domestic market, apparent aluminium consumption grew at a healthy 12% during H1FY2016 on an annualized basis, driven mainly by the power transmission sector. While the healthy demand growth was matched by a strong domestic aluminium production growth as well, following the ramp up of production at some of the greenfield smelters commissioned in the last couple of years, a significant share of the domestic market continues to be catered to by imports both in the forms of scrap as well as ingots. Consequently,domestic manufacturers remain exposed to the threat of imports. – Neal Bhai Reports