India’s primary aluminum producers propose scrap import fee hike

A trade group representing India’s primary aluminum producers reportedly is urging a government ministry in that nation to quadruple the tax placed on aluminum scrap imported into India.

The Aluminum Insider says the Aluminium Association of India (AAI) has been contacting India’s government to seek an increase from 2.5 percent to 10 percent on the customs duty for imported aluminum scrap.

The existence and amount of the duty has long been a contentious issue that pits primary smelter operators in India against recycled-content secondary producers. Scrap-fed secondary producers also have accused the primary aluminum makers of attempting to impose onerous and baffling standards on inbound aluminum scrap.

The primary production-focused AAI group refers to a 24 percent surge in aluminum scrap imports, a condition it claims results in an outflow of some $7 billion, thus harming India’s on the foreign currency exchange front.

U.S. Census Bureau statistics gathered by the U.S. Geological Survey show in the first eight months of this year, U.S. recyclers shipped 319,000 metric tons of scrap to India—placing India atop that list, followed by Malaysia (244,000), South Korea (185,000), China (147,000) and Thailand (139,000).

According to the Aluminum Insider report, the AAI also is expressing concerns about the environmental impact of imported scrap’s usage. That argument can be greeted with skepticism, considering figures gathered for a 76-page 2021 report on aluminum prepared for Singapore-based DBS Bank.

That report says each metric ton of primary aluminum made with mined ore creates 16 metric tons of CO₂ emissions. “Production with scrap usage of up to 75 percent reduces CO₂ emissions to 2.3 metric tons per metric ton of aluminum [and] secondary production using 100 percent of scrap aluminum emits only one-half of a metric ton of CO₂ per metric ton of aluminum [made]," it continues.

At the same time it is requesting a higher duty on imported scrap, the AAI also is asking India’s government to lower the customs duties on some of the raw materials used by primary producers, according to the news report.