How to Start Aluminium Ingot Manufacturing from Scrap in India
Contents 9 sections
- What does an aluminium ingot plant cost, and what decides the margin?
- Which aluminium ingot should a new manufacturer make first?
- How is aluminium scrap turned into ingots?
- Which machines does an ingot plant need?
- Which aluminium scrap pays, and where should you buy it?
- Which licences and approvals does an ingot unit need?
- Who buys the ingots, and what can go wrong?
- What should you do first?
- Frequently asked questions
Aluminium ingot manufacturing means melting sorted aluminium scrap, correcting its chemistry with alloying metals and casting it into ingots that die-casters and foundries buy by grade. Your profit is the gap between what you pay for scrap and what a buyer pays for a graded ingot, after melt loss, fuel and labour. The gap is thin, so the order of your decisions matters more than the furnace.
Settle three things before ordering any machine: where the scrap will come from, which alloy a named buyer will take, and what consent your state pollution board will give the site. Scrap is the hard question in 2026, because the Ministry of Mines says secondary producers import 80 to 85 per cent of their raw material. Start on domestic scrap, sell against a buyer's written specification, and add imports only once both are running.
What does an aluminium ingot plant cost, and what decides the margin?
Plant size sets the investment; scrap price sets the margin. In the NPCS project report on aluminium ingots from aluminium scrap, a plant making 14 tonnes of alloy ingots a day needs plant and machinery of ₹7 crore and total capital investment of ₹33.15 crore. Smaller units cost less, mainly where they omit shredding, decoating and fume-treatment lines.
The table shows where each tonne makes or loses money.
| Cost line | What moves it | Pressure in 2026 |
|---|---|---|
| Scrap purchase | Grade, domestic or imported, duty | Duty, freight and supply gaps push it up |
| Melt loss and dross | Paint, oil, moisture, furnace type | Mixed painted scrap loses more metal than clean offcuts |
| Alloying metals and fluxes | Silicon, copper, magnesium for the grade | Set by the buyer's specification |
| Fuel or power | Furnace type, batch size | Part-filled batches waste fuel |
| Working capital | Scrap paid on delivery, ingots sold on credit | Longer buyer credit ties up cash |
Whether the unit pays depends on the scrap-to-ingot spread between the day you buy and the day you sell. Fix the selling rate when you buy scrap wherever the buyer allows.
Which aluminium ingot should a new manufacturer make first?
This page covers secondary aluminium, made from scrap. Primary metal is smelted from alumina in a different kind of plant; see how alumina is made.
| Ingot | Scrap it suits | Who buys | Difficulty |
|---|---|---|---|
| Die-casting alloy (ADC12, LM24 type) | Cast parts, wheels, clean mixed scrap | Pressure die-casters for automotive and two-wheeler parts | Moderate: tight silicon and copper limits |
| Foundry alloy (gravity and sand casting) | Cast scrap, sheet, extrusion offcuts | Local foundries making pumps, fittings, utensils | Lower: wider limits, many small buyers |
Extrusion billets need clean extrusion offcuts and a different casting line, so treat them as a separate project.
How is aluminium scrap turned into ingots?
- Weigh and sample the scrap. Reject sealed containers and wet lots, and trial-melt before accepting a large consignment.
- Sort by alloy, then cut or shred large pieces so the furnace feeds evenly.
- Pull out iron with a magnet and dry or decoat oily and painted scrap, since coatings and moisture cause metal loss and fumes.
- Charge the furnace and melt, adding flux so the oxide layer separates.
- Skim the dross off the surface and send it for metal recovery.
- Add silicon, copper or magnesium to reach the buyer's grade, test the chemistry on a spectrometer and adjust.
- Degas and filter the melt to remove dissolved hydrogen and inclusions.
- Cast into moulds, cool, stack, number each heat and issue a test certificate.
Which machines does an ingot plant need?
| Machine | What it does |
|---|---|
| Cutter or shredder, magnetic separator | Sizes the scrap and pulls out iron |
| Decoating or drying kiln | Burns off oil, paint and moisture before melting |
| Tilting or rotary furnace | Melts mixed scrap in batches; induction suits only clean, sorted feed |
| Holding furnace | Keeps metal hot while the chemistry is corrected |
| Degassing unit and filter | Removes hydrogen and inclusions |
| Ingot casting machine | Moulds the metal into uniform ingots |
| Spectrometer | Confirms alloy chemistry heat by heat |
| Fume extraction and bag filter | Captures furnace emissions, which the pollution consent depends on |
Which aluminium scrap pays, and where should you buy it?
No grade is profitable by name. The one that pays has a discount to ingot price that exceeds its melt loss and processing cost on your furnace. Clean single-alloy scrap such as extrusion offcuts, sheet cuttings and cable recovers the most metal. Painted, oily, thin or mixed scrap is cheaper per tonne but needs the decoating kiln. Dealers sell by trade names such as tense, so insist on a sample and a recovery trial. Beverage cans are a separate stream: see aluminium can manufacturing.
Imports are riskier for a new unit. India imported about 2.02 million tonnes of aluminium scrap in 2025-26, and Gulf countries banned scrap exports from 10 June 2026, a ban expected to run to 8 October, so check whether it was extended. Scrap carried 2.5 per cent customs duty as of July 2026, when the Mines Ministry recommended removing it, while the Aluminium Association of India wants a BIS scrap standard notified first. Confirm the duty before signing an import contract. Domestic dealers, foundries and extruders are the safer first source, as in copper scrap recycling.
Which licences and approvals does an ingot unit need?
| Approval | From | Why it matters |
|---|---|---|
| Udyam registration and GST | Government portals | GST for invoicing; Udyam for MSME schemes and bank finance |
| Consent to establish and operate | State pollution control board | Category depends on furnace, fuel and hourly capacity; apply before building |
| Hazardous waste authorisation | State pollution control board | Aluminium dross is listed as hazardous waste in the 2016 waste rules |
| Factory licence and fire NOC | State factories department, fire service | Furnace floors get inspected |
| Import-Export Code | DGFT | Only if you import scrap |
BIS certification is not compulsory right now. A 2023 order was due to make the BIS Standard Mark mandatory on aluminium alloy ingots and castings (IS 617), but the Ministry of Mines withdrew it on 13 November 2025 and can reinstate it. Buyers still ask for a chemistry certificate, so keep spectrometer records.
Who buys the ingots, and what can go wrong?
Die-casters supplying automotive and two-wheeler makers, foundries and traders buy by grade and want a heat-wise test certificate. Three risks recur:
- Price lag: scrap bought today becomes ingot weeks later, so a fall in metal prices eats the spread.
- Quality drift: one bad scrap lot spoils a heat, and the buyer rejects it.
- Compliance: fumes from coated scrap and dross disposal draw notices when filters and waste records slip.
What should you do first?
- Get written ingot specifications from two die-casters or foundries near you, and ask what monthly tonnage they would give a new supplier.
- Buy five-tonne sample lots from two scrap dealers and run recovery trials.
- Ask your state pollution board which category your furnace and fuel fall under before buying land.
- Collect quotations at your intended capacity from two furnace makers.
An NPCS project report on this product sets out capacity, plant and machinery, raw materials, manpower, working capital, break-even and cash flow in the format banks usually ask for. NPCS has prepared project reports since 1994 for clients in 85 countries. Read its numbers against your own scrap price and buyer terms. For more scrap-based ideas, see recycling business ideas.
Frequently asked questions
What is the price of 1 kg of aluminium ingot?
There is no single price: it changes daily and differs by grade. Indian trade quotes ingots per tonne, so divide by 1,000 for a per-kg figure. Primary ingot from producers such as Nalco follows the global metal price; alloy ingots like ADC12 trade at their own rate. Check Nalco's published price circular, BigMint or alCircle spot reports, and the day's LME or MCX rate.
Is the aluminium recycling business profitable?
It can be, but the margin is narrow and depends on the scrap-to-ingot spread, melt loss and how quickly you sell. Units with a fixed buyer, steady clean scrap and strict chemistry checks do better than traders buying whatever is cheapest. Test your plan at a smaller spread than today's.
Which company manufactures aluminium ingots in India?
Nalco, Hindalco and Vedanta make primary aluminium ingots from bauxite. Alloy ingots from scrap come from many small and mid-sized recyclers, usually near automotive and foundry clusters.
What are the disadvantages of recycling aluminium?
Melting still uses fuel or power, coated and oily scrap releases fumes, dross is hazardous waste needing authorised disposal, and some metal is lost in every melt. Mixed scrap is harder to control, and imported scrap exposes your cost to duty and supply changes.
Can a small unit start with an induction furnace?
Yes, if the scrap is clean and sorted, such as extrusion offcuts. Painted, oily or mixed scrap melts better in a tilting or rotary furnace after decoating. Choose by the scrap you can buy steadily.
Planning a new manufacturing unit?
NIIR prepares detailed project reports and feasibility studies for new projects. Share your requirement and the team will get in touch.
