Aluminium mkt will continue to face competition from imports under FTA: Ind-Ra

The domestic aluminium market will keep facing competition from continuing imports under FTA, India Ratings and Research (Ind-Ra) said Thursday.

The competition may increase as the protectionist measures undertaken by the US will divert Chinese output to the rest of the world, as per the rating agency.

"The domestic aluminum market will continue to face competition from continuing imports under free-trade agreements (FTA)," it said in a statement.

On March 9, US President Donald Trump imposed heavy tariffs on imported steel and aluminium items, a move that has sparked fears of a global trade war.

Domestic demand for aluminum improved during the first half of the current fiscal in line with its expectations and is likely to continue to improve during the second half of FY19 as well, driven by a rise in government spending on improving power transmission and distribution infrastructure in the country, Ind-Ra said.

In the domestic market, it said, premiums and imports have gone up in the last three months post production stoppage at Vedanta Ltd's Tuticorin plant.

"Hindalco Ltd, Hindusthan Copper Ltd and importers are likely to continue to benefit until the operations resume at the Tuticorin plant," it added.

The Tamil Nadu government had, on May 28, ordered the state pollution control board to seal and "permanently" close the mining group's copper plant following violent protests over pollution concerns.