US sanctions on Russia, boost India's aluminium sales; report
08 Oct 2018
Indian aluminium makers like Hindalco Industries and Vedanta Ltd are exporting more to Japan thanks to US sanctions and tariff hikes that chocked supplies from Russia’s Rusal to Japan and other major markets, say reports.
Japanese aluminium importers generally do not prefer Indian product that are regarded as not of better quality and import aluminium from top-tier producers like Rio Tinto, Alcoa and South32 as well as United Company Rusal.
However, imports of aluminium ingot from India doubled in the first eight months of 2018 from a year ago, a Reuters report quoting Japanese trade data said, adding that imports of alloy surged 11-fold off though from a tiny base.
Rusal, the world’s second-biggest aluminium maker, accounted for about 20 per cent of Japan’s imports of both aluminium ingot and alloy in 2017, but this has now been hit by US sanctions.
Reports quoting Japanese sources said customers forced to switch to alternative sources of metal are likely to settle for safe sources even after the United States eased sanctions restrictions for some customers.
Japanese trading houses such as Mitsubishi Corp have been aggressively importing supplies from India as well as other countries to help customers diversify supply, trading sources said.
Substitute material for Rusal’s higher quality products comes mostly from the Middle East and Malaysia while refined ingots such as billets and slabs are sourced from India.
However, sources say Indian metal is winning market, although at a discount to traditional suppliers.
“Japanese buyers are getting Indian metal for cheap,” the source said.
Japan took 59,545 tonnes of aluminium ingot in the eight months to March, double a year ago, while imports from Russia fell 21 per cent to 175,694 tonnes, Japanese trade data showed.
Imports of aluminium alloy from India jumped to 3,008 tonnes over the same period, while Russian imports fell 10 per cent to 185,685 tonnes.