Business Standard reported that with imports of finished aluminium products having risen over 50 per cent year to date, the micro, segment is witnessing sharp margin contraction and slim hope for change in situation for the next six months. Mr Anil Agarwal, patron, Aluminium Secondary Manufacturers Association, told Business Standard that “Margins of MSME players have dropped to 2-3 per cent, from 8-10 per cent, as the surge in finished goods is eating into our business.”
The trade war between the US and China has led to the dumping of aluminium finished products into India from both these countries along with countries India has a free trade agreement with, such as Vietnam, Malaysia, Singapore, Japan, and South Korea.
Overall, have grown 21 per cent year-on-year. Mr Agarwal said that “So far, there are no shutdowns in the MSME segment, but there are several units that have come down to barely breaking even when the demand for finished aluminium is sizeable in the market.”
Primary aluminium producers, too, have been asking for a hike in import duty on primary aluminium to 10 per cent, from 7.5 per cent, and to 15 per cent and 12.5 per cent for downstream, from 10 per cent and 7.5 per cent, respectively.
Mr Satish Pai, managing director at Aditya Birla Group company Hindalco Industries said that “Protection from cheap imports should be for all segments of aluminium and not just select ones. Among downstream producers (MSMEs), the thought is that if primary aluminium import duty goes up, domestic prices will also go up, but in downstream, primary metal is just a pass-through. Moreover, if duty on primary aluminium goes up, the entire chain will see revised pricing.”
The domestic comprises 3,500 MSME players and three large primary producers Hindalco Industries, Vedanta, and state-owned National Aluminium Company.
The secondary aluminium players see no change in their business situation at least in the near term. Mr Agarwal said that “With elections round the corner and the interim Budget just done, we have no hope for any action from the government at least for the next six months. We will have to continue tackling the tough business scenario, finding ways to survive.”
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