MUMBAI: In spite of the government rationalising tariffs on brass
scrap imports by over 20%, metal traders are facing trouble as the import rates
for the commodity continue to be far lower. Bombay Metal Exchange (BME), the industry body for metals, is making further representation to the Centre to lower the tariff value more, as goods are stuck at the western ports due to substantial disparity in the assessment of import duty.
Surendra Mardia, president of BME pointed out that even after the revision of the tariff value by the government the international price of brass scrap is quoting nearly $1,000 lower. “This is pinching the metal traders who have to shell out more money despite the rates being low,” he said.
Effective January 1, 2009, the customs and revenue department revised the tariff value on brass scrap to $3,252 a tonne from $4,082. However, the brass scrap price have drastically fallen and are currently quoting between $1,700-1,800 a tonne in the international market.
“Many importers are refusing to pick up the goods from the ports as they are having to incur huge losses,” said Mr Mardia. The situation is becoming serious and we fear if such circumstances continue to prevail most of the units will be left with no other option but to shut down their units, he said.
Brass ingot is essentially made from brass scrap, and while melting there is a 10-12% loss. BME argues that even with a 20-25% price discount for the scrap, the price should not exceed $2,000 a tonne, when the prevailing international price is quoting at $1,800 a tonne. Nearly 70% of India’s brass requirement is met through imports, and most of the brass manufacturing units come under the small scale sector which is largely unorganised. They mainly operate in Uttar Pradesh, Maharashtra and Gujarat
Source : The Economic Times