India’s Aluminium Secondary Manufacturer Association (ASMA) fears alloy production could be affected in the coming month if the COVID-19 outbreak and the resulting travel restrictions persist.
Anil Agarwal, a senior Vice President of Jindal Aluminium and a patron of ASMA told Davis Index, COVID-19 related shutdowns have started affecting the market and situation could worsen next week. He further added that scrap imports have reduced as traders and dealers are staying away from booking orders.
Annual primary aluminium production in India is around 3.85mn mt and secondary aluminium production is 1.85-2mn mt. ASMA has over 130 secondary alloy makers with 50pc of the members operating in North India.
At present, only a few large secondary aluminium producers are working at full capacity. Many others are operational at 50pc of their capacity. Earlier in Dec 2019, a pickup in seaborne trade of aluminium ingots with China had resulted in these units operating at their full capacity.
Production units running amid COVID-19
Alloy makers in all the regions in India have take steps to safeguard their workforce. Soaps and masks are been provided to the employees. The workforce is also screen through thermal scanners before allowing them to work. The support staff has been asked to come to work every other day to reduce the density of people.
Though Lead smelters in India at present are not encountering challenges, they anticipate a hindrance to trade in the near term. State governments are imposing travel restrictions which could affect trades.
Lead smelters did not encounter the challenges due to restricted movement instruction issued by the administration in Delhi. The smelters said that they are anticipating hindrance going ahead. Supporting industries like logistics and have hiked their charges which is likely to affect trade. Producers of zinc ingots are lagging behind in their sales commitments.
Prices fall on LME
The three-month official contract for copper, aluminium, lead and zinc dropped on Thursday from the prior. The three-month official contract for copper fell by $710/mt to $4,690/mt, by $97/mt to $1,845/mt for zinc, by $69/mt to$1,676/mt for lead and by $51/mt to $1,607/mt for aluminium from the prior week.