India’s aluminum makers win over Japanese sales

Indian aluminum makers including Hindalco Industries and Vedanta Ltd. are boosting sales to Japan as US sanctions against Russia’s Rusal and import tariffs shake up traditional supply routes.

India’s product has generally not been regarded as high enough quality by Japan’s demanding buyers.

However, imports of aluminum ingot from India doubled in the first eight months of 2018 from a year ago, Japanese trade data shows, while imports of alloy, which include higher-value products, surged 11-fold off a tiny base.

The increased trade is a blow to Rusal, the world’s second-biggest aluminum maker, which accounted for about 20 percent of Japan’s imports of both aluminum ingot and alloy in 2017, has been hit by US sanctions.

Customers globally have had to scramble to find alternative sources of metal even after the US eased sanctions restrictions for some customers, and they were likely to permanently diversify supply chains, said a source.

“Many of their customers are reluctant to order the same amount of supplies that they have bought in past years for next year even if the US sanctions are lifted,” according to the trader.

Products from India are mainly refined ingots rather than value-added products such as billets and slabs, said a second trading house source.

Substitute material for Rusal’s higher quality products has come from the Middle East and Malaysia. However, Indian metal was winning growing acceptance and was also being sold at a discount to traditional suppliers.