MUMBAI (Scrap Register): A lack of coal, coupled with a setback in rail rakes, is fundamentally pushing up production costs for India's domestic primary Aluminum makers. The expense of power accounts for 45 percent of the total expense for the business.
Rail rakes have been pulled out from ports and mine locations, leading to logistical issues for non-power consumers in transporting their raw material, said industry officials.
In a bid to reduce the country's import bill and meet the increasing power demand, Coal India has diverted increased quantities of the commodity to power plants, leaving non-power consumers such as the Aluminium and cement industries parched for raw material, since the past six to eight months.
Amid falling prices of Aluminium and pressure to keep costs low, cheap scrap import has been breaking the industry's backbone.
The domestic Aluminium industry is going through this rough patch at a time when global Aluminium prices have dropped below $2,000 per tonne in November, from about $2,500 per tonne in April.
Increased imports of scrap due to the ongoing trade wars and sanctions are yet another hurdle the growing industry is facing.