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Copper product makers seek import duty cut

Companies, which convert non-ferrous metals into finished products, said on Thursday they were reeling from the impact of uniform Indian customs duties for finished copper products and the raw materials used to make them.

"Domestic prices are 20-30 percent higher than imported prices (for products)," said Surendra Mardia, vice president of Mardia Extrusions Ltd, a conversion company.

India has some 1000 small firms, which convert non-ferrous metals into finished products. They use copper cathodes and scrap as raw materials to make value-added copper products used in the electrical, electronics, construction and many other sectors.

Right now, finished copper products such as rods and tubes attract 35 per cent basic duty. That is the same levy as on items such as copper scrap and cathodes, which are mainly used as raw materials by the small conversion companies.

"The uniform duty structure has disastrous effects...it is killing our industry," Ashok Bafna, president of the Bombay Metal Exchange, a body of non-ferrous metals trade and industry.

He said 50 per cent of the conversion companies had shut down in the last three years because of the duty structure.

IMPORTS CHEAPER

Metals traders said imported value-added copper products were cheaper than domestic ones because of the duty structure and that big companies now were directly importing their copper product requirements due to the price difference.

Metals traders said they could cater only to small firms and retail consumers who could not import because of low volumes.

Domestic prices of air-conditioning refrigerator copper tubes were Rs 240 per kg ($5.17) against an imported cost of Rs 180. Likewise, prices of copper foils were Rs 260-Rs 280 per kg compared with Rs 210-Rs 220 of imported material.

The Bombay Metal Exchange has demanded a cut in basic import duty on copper scrap to 15 per cent. It also wants a reduction on items like cathodes and wire bars to 20 per cent from the current uniform rate of 35 per cent on all these products.

"We're fighting for different rates of duties but nothing is coming," Sharad Parikh, partner of Parikh Metal Industries said.

Metal traders said sourcing of raw material from domestic primary copper producers was not a viable option since their prices were linked to the London Metal Exchange (LME).

Indian demand for refined copper at present is estimated at about 300,000 tonnes a year against domestic production of about 270,000 tonnes. Copper scrap demand, being met through imports and recycling, is estimated at about 120,000 tonnes per annum.

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