• Investment World
• eWorld
• Brand Line
• Mentor
• Life
• Canvas
• Praxis
• Urban Pulse
• Brand Quest
• The New Manager

Stocks

• Quotes
• SE Diary
• Scoreboard
• Open-End Mutual Fund

Cross Currency

• Rates
  
  

Shipping

• Ports
  
  

Archives

• Yesterday
• Datewise
• Resources
• In Focus
• In Depth

Group Sites

• The Hindu
• The Hindu ePaper
• Business Line
• Business Line ePaper
• Sportstar
• Frontline
• The Hindu eBooks
• The Hindu Images

Gargi Shah

Will only help reduce cost of production, say industrial users

Advertisement

Mumbai Jan. 25 While domestic producers of zinc, copper, aluminium, have announced a reduction in their sales price following the reduction in customs duty, the consuming industries appear to be in no mood to pass on the fiscal benefit to end users.

Industrial users of base metals welcomed the Union Government move to slash customs duty. However, they said the benefit accrued from such reduction will only help them to reduce the cost of production.

This means that consumer goods that have metals and stainless steel as major raw materials may not become any cheaper.

The Union Government reduced the rate of customs duty from 7.5 per cent to 5 per cent on primary and semi-finished forms of copper, aluminium, zinc, tin and other metals.

Post the duty cut, Hindustan Zinc Ltd, the country's largest producer of zinc, reduced zinc prices by Rs 4,500 a tonne, while Binani Zinc Ltd reduced it by Rs 5,000 toRs 2,18,000, according to company officials.

Hindalco Industries Ltd reduced price of aluminium ingot by Rs 3,400 a tonne to Rs 1,35,400.

Sterlite Industries Ltd, a copper major, confirmed reduction in their sales price.

Users of these metals such as zinc and aluminium for galvanisation of steel claimed that they had to bear the burden of high metal prices early to mid last year. Metal prices had reached multi-year highs in the international markets last year.

"This decision is welcome even now when prices of base metals have declined internationally," said Mr Saurabh Mittal, Deputy General Manager, Finance, Bhushan Steel and Strips Ltd, users of zinc and aluminium.

"If at all there is a reduction in prices of our products, it may be small," said Mr Mittal.

The reduction in customs duty would lead to lower production cost, said Mr Seshagiri Rao, Director, Finance, JSW Steel Ltd.

With this reduction, the duty level for metals will probably be the lowest in ASEAN countries and way below the WTO level.

"The primary objective seems to be controlling inflation in general and in particular, high costs in the manufacturing as metals are key input in capital goods industry," said Mr Tarun Jain, Director, Vedanta group of companies.

However, the domestic metal prices are directly linked to the prices on the London Metals Exchange and based on the landed cost of imports (import parity prices), he said adding that the duty cut would not lead to any additional imports, as domestic prices are import linked.

More Stories on : Metals | Excise and Customs | Policy

Article E-Mail :: Comment :: Syndication :: Printer Friendly Page

Stories in this Section
Investors taken aback by ban on tur, urad futures trading

Copyright © 2007, The Hindu Business Line. Republication or redissemination of the contents of this screen are expressly prohibited without the written consent of The Hindu Business Line