After steel, minimum import price for aluminum on cards?

MIP serves as the floor rate below which overseas shipments of specified items are not allowed to enter Indian shores.

The mines ministry has asked Mecon to suggest a new MIP range on the non-ferrous metal, updated on current global price trends, the official said. 

“Mecon had proposed MIP rate of USD 2,066 per tonne for primary aluminium products (which includes ingots, billets and wire rods) last month. We have further asked them to look at rates,” said the official, who did not wish to be identified.

The revised report would be ready in the next seven days, the official said.

The consulting firm had also recommended MIP price for secondary aluminium products such as tubes, wires and cables.

While an MIP of USD 3,108 per tonne was proposed for aluminium tubes and pipes, USD 2,349 per tonne was recommended for wires, the official said.

A floor price of USD 2,403 per tonne was projected for aluminium cable and conductors.

The mines ministry has now asked Mecon to examine whether the proposed MIP should be revised given changing global benchmark prices as seen in the London Metal Exchange (LME) indices.

Average monthly LME prices of aluminium have risen 11 percent since April, to USD 1,735 per tonne in November.

It was, however, not clear whether Mecon would revise the floor rate upwards or slide it to a lower level.

Top Indian aluminum makers have complained that Chinese dumping the metal in India has depressed prices and hit companies’ profitability.

Aluminum imports have risen 78 percent in the last five years -- to 432,370 tonnes in 2015-16 from 242,533 tonnes in 2011-12.

Aluminum makers include Hindalco, Vedanta and National Aluminum.

Company have been pressing the government for immediate measures to arrest the import surge and help local producers realise better prices and margins.

The industry had appointed Mecon to study the case for imposing MIP on aluminium.

Earlier this year, these companies had also approached the Directorate General of Safeguards for imposition of the duty on unwrought aluminium.

The Directorate, however, in its final findings last week ruled out the imposition of the trade barrier on the product.

In February, the government had imposed an MIP, ranging between USD 341-752 per tonne, on 173 steel products for a period of six months to guard local industry against cheap Chinese imports.

This list was later cut to 66 items in August and subsequently to 19 products in December. MIP has now been extended till February.

The increase in of steel had hurt the automobile industry as it did not allow the full benefits of lower global commodity prices to be passed on automobile companies.