Further fall in aluminium prices will make production cut inevitable

Aluminium producers in India seem to be worried with the slump in metal’s price. The aluminum arm of India’s Vendanta Ltd is just about scrambling to keep its business viable. Underutilized capacity is already adding to their cost; sources say any further fall in the metal prices would likely force the company to scale down its production.

Meanwhile, with smelters becoming economically unviable, the company is seeking access to other raw materials like power, bauxite and coal.

Last week, the Aluminium Association of India (of which Vedanta, Hindalco and others are part of) met the Mining Secretary, as well as Chairman of Excise and Customs seeking import duty hike of 10 percent from current 5 percent.

The Association cited that imports have surged to a whopping 159 percent between FY11 and FY15. Imports alone account for 56 percent of India’s consumption.

Steel and aluminium companies have sought protection from government against alleged dumping by the Chinese as well as Russian metal producers.

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