India signals higher aluminum import tax, stoking Vedanta rally1 min read . Updated: 19 Nov 2015, 04:36 PM IST
The aluminum import tax will go up to 7.5% or to 10% from 5%, says mines secretary Balvender Kumar
New Delhi/Mumbai: The government is considering as much as doubling the levy on aluminum imports to counter supplies from China, according to a mines ministry official, stoking a rally in the shares of producers Vedanta Ltd., Hindalco Industries Ltd. and National Aluminium Co.
The proposal will be put forward for discussions with finance ministry ahead of the nation’s budget speech, mines secretary Balvender Kumar said in an interview on Thursday on the sidelines of a conference in New Delhi. The budget is due around the end of February next year.
“We’re considering the raising of duties," he said. “It will go up to 7.5% or to 10% from 5%."
The prospect of a stiffer shield against imports saw Vedanta, the top Indian producer, advance as much as 3.3% in Mumbai. Hindalco jumped as much as 3.1% and Nalco 4.5%, the most in more than a month. Producers have been squeezed by a collapse in aluminum prices amid a slowdown in China’s economy and low-cost supplies from abroad.
Vedanta’s local smelters are running at 40% of capacity, chairman Anil Agarwal said on Wednesday.
Aluminum prices have slumped 27% in London in the past 12 months to a six-year low. Supply will top demand through to 2018, according to BMI Research. Bloomberg