Primary, secondary aluminium producers not on same page on MIP

The Mines Ministry's efforts to bring the primary and secondary aluminium producers together on the imposition of a minimum import price (MIP) on the metal have not yielded any results so far.
The ministry held marathon meetings with both, all through last week, to arrive at a consensus over the imposition of MIP in a bid to check cheap imports from China and some Middle Eastern nations, a source said.
The government is concerned over cheap aluminium imports that is impacting the sales and margins of domestic firms, the source said.
The exercise is being done on the instructions of Mines Minister Piyush Goyal, who has directed the ministry to work with all stakeholders and evolve a consensus on checking cheap aluminium imports and increasing exports, the source added.

Another top source confirmed that last week, the Mines Ministry held several rounds of meetings with primary and secondary producers, but nothing much transpired from it.
"While, the Ministry is aware of the situation faced by primary producers due to cheap imports, the Minister (Goyal) has said that decisions should be taken keeping in view the interests of all stakeholders," he added.

The official further said that although secondary producers have agreed on raising duty on aluminium imports, they are of the view that the government should also keep the interests of the industry in mind and rationalise the domestic prices.

The secondary producers are of the opinion that as soon as the import duty is raised, their cost of production will also go up which the government needs to consider, the source added.
Elaborating on it, the official said that the secondary producers feel that the domestic aluminium prices are based on import price parity. Now, primary producers will raise prices when import duties are hiked, but they will be affected as their input costs will also go up which will impact margins.
Secondary producers want price rationalisation as they would not be able to pass all the burden on to the consumers in a bid to stay competitive, the official said.

"Ministry will further discuss these issues with both to thrash out the differences on the duty and try to arrive at a consensus. Good thing is that both (primary and secondary) agree that strategic interest of the country and the domestic industry are of paramount importance," the source added.
In the last few months, primary aluminium producers -- Vedanta, Hindalco and Nalco -- have been lobbying with the government to impose a MIP on the lines of the steel sector.
Last month, industry body Aluminium Association of India met Finance Minister Arun Jaitley and made a case for imposing MIP on aluminium products. They also met Goyal as well as senior officials in Mines and Commerce Ministries.

In August, Goyal told PTI that he personally favours imposing MIP on the metal to protect the domestic industry.
According to industry data, aluminium imports rose by 12 per cent to 404 kilo tonnes (KT) during April-June 2016-17 as against 389 KT in the year-ago period.