Aluminium cos pin hope on budget

It is estimated that the downstream players can make a potential saving of almost Rs 250 crore on a reduced import duty on scrap for recycling purposes from an average 25,000 tonne per annum unit.

The cost benefits include the fact that an optimal modern aluminium scrap recycling plant can be viable with a 25,000 tonnes per annum capacity, whereas the minimum scale for modern aluminium smelters is 2,40,000 tonnes.

Moreover, primary producers could fetch a premium over the LME with regard to high purity metal which at times are mixed with alloys for applications in certain grades of products, which do not require a high purity metal. The need to import scrap stems from the fact that domestic scrap is not segregated and is unsuitable for recycling.

According to industry estimates, most countries of the world have witnessed a tremendous upsurge in recycled aluminium. For example, in Italy and Japan, recycled aluminium forms 41 and 30 per cent of the total aluminium consumption of the country. In UK and Germany, recycled aluminium accounts for some 25 per cent. Furthermore, 35 per cent of the world’s consumption of aluminium is covered by recycled or reclaimed metal.

The downstream players have also called for a gradation between import duties of metals and semi-fabricated items, which are ruling at 31 per cent at present. Last, but not the least, the industry has urged for a reduction of excise duty of 15 per cent to 10 per cent in line with the steel industry which has called for an effective reduction.