The mines ministry may shortly decide on the merits of levying a minimum import price (MIP) on aluminum products to safeguard the local industry from a surge in cheap inbound shipments.
December 27, 2016
After steel, the mines ministry may favor MIP to protect local industry from a flurry of cheap imports. An MIP of USD 3,108 per tonne was proposed for aluminum tubes and pipes whereas USD 2,349 per tonne was recommended for wires. As per media reports, the ministry is awaiting a fresh set of recommendations from state-owned consulting and engineering firm Mecon on an MIP range on a raft of imported aluminum products. The accepted recommendations would be forwarded to the commerce ministry for final approval. MIP serves as the floor rate below which overseas shipments of specified items are not allowed to enter Indian shores. Top Indian aluminum makers have complained that imports have risen 78 percent in the last five years to 432,370 tonne in 2015-16 from 242,533 tonne in 2011-12 affecting the profitability of the companies.
Going by the reports, Mecon had proposed MIP rate of USD 2,066 per tonne for primary aluminum products (which includes ingots, billets and wire rods) last month. The consulting firm had also recommended MIP price for secondary aluminum products such as tubes, wires and cables. While an MIP of USD 3,108 per tonne was proposed for aluminum 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 aluminum 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 aluminum 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.
