Aluminium extrusion industry warns of factory closures as production falls

The aluminium extrusion industry in India is grappling with factory closures and job losses as production has plummeted from pre-Iran war levels to only about 27-30 per cent of installed capacity. Production has dropped to 8-9 lakh tonnes from around 12 lakh tonnes, while capacity utilisation has slipped from roughly 40 per cent to the current level.

Jitendra Chopra, President of the Aluminium Extrusion Manufacturers Association of India (ALEMAI), stated that if the government does not act soon, manufacturers may be forced to shut down their factories. The decline is attributed to supply-chain disruptions, energy costs, and expensive raw materials. Imports of aluminium products have surged to around 15-16 lakh tonnes, more than double the domestic production.

Chopra urged the government to remove the 7.5 per cent basic customs duty on primary aluminium, arguing that it inflates raw-material costs for downstream manufacturers. Global aluminium prices have surged, with LME prices rising from around $2,200 a tonne to over $3,700 a tonne. Associations representing the industry, including CACMAI and ASMA, contend that domestic aluminium is priced at international levels, leaving downstream manufacturers to bear the duty burden.

The squeeze is evident in reduced employment and working capital, with 30 per cent of the workforce having been cut in the past year.