§1What this business is
Clean aluminium scrap of about 99% purity is melted in graphite crucibles in coke-fired pit furnaces under a cover flux. For shots, the molten metal is poured through a vibrating refractory-coated sieve into a tank of circulating water; the shots are graded and oversize pieces are remelted. Notched bars are cast in moulds. Steel plants and induction-furnace units add them to molten steel as a deoxidiser. The product should meet IS 1253:1965.
Capacity: 120 MT a year on one shift; sales worked out on 119 MT a year.
§2Is it right for you?
Who it is for
A scrap or metal trader near steel and induction-furnace plants who can buy clean aluminium scrap at a good price.
Who it is not for
Someone without working capital or a steady scrap source — the furnaces are cheap, the metal is not.
Advantages
- Very small machinery cost — the money goes into raw material
- Simple process: melt, pour, grade, test
- Steady buyers in steel plants and induction-furnace units
- Oversize shots are simply remelted, so little waste
Drawbacks
- Margin is thin — about 7% of sales
- Needs a large sum tied up in aluminium scrap
- Smoke and heat from coke-fired furnaces
- Melting loss (3.5% in the profile) eats into profit
Skills you need
- Sorting scrap and removing iron with magnets
- Melting under flux with low metal loss
- Grading shots by size
- Selling to steel plant purchase departments
Why difficulty 2/5: Simple process, but profit depends on buying scrap well and keeping melt loss low.
§3Market
Who buys
- Integrated steel plants
- Mini steel plants with induction furnaces
How it sells
- Direct supply against purchase orders
- Registration as a vendor with steel plants
Good to know
- The profile names Durgapur, Bhilai, Rourkela and Salem steel plants and small induction-furnace plants as the market.
- It presumes demand of over 1,500 MT a year for aluminium shots.
§4Raw material & machinery
| Item | Qty | Cost |
|---|---|---|
| Coke-fired pit furnaces for 40 kg aluminium crucibles, with 5 HP blower | 4 | ₹60,000 |
| Vibratory refractory sieve with 2 HP drive | 1 | ₹20,000 |
| Water tank with circulation pump (1 HP) | 1 | ₹5,000 |
| Electric hoist, 1 tonne | 1 | ₹20,000 |
| Platform weighing machine, 500 kg | 1 | ₹15,000 |
| Testing equipment | 1 lot | ₹50,000 |
| Exhaust arrangement for pollution control | 1 lot | ₹10,000 |
| Moulds, ladles, ladle holders and hand tools | 1 lot | ₹20,000 |
From: DC-MSME project profile — Aluminium Shots and Knotched Bars (2002)
- Commercial-grade pure aluminium scrap10 MT a month at ₹70 a kg in the profile
- Fluxes and chemicals₹10,000 a month in the profile
- Coal for the furnaces4 tonnes a month at ₹8,000 a tonne in the profile
From: DC-MSME project profile — Aluminium Shots and Knotched Bars (2002)
Suppliers in Building Business Bazaar
Wesman Engineering Co. Ltd · Kolkata →Steelage Engineers · Rourkela →
In our raw material database
Aluminium ingot, billet and wire rod (primary) →Aluminium scrap →
§5Licences & registration
- Udyam registration
- GST
- State Pollution Control Board consent to establish and operate (furnace emissions)
- Registration with the State Pollution Control Board if you handle non-ferrous scrap under the Hazardous Waste Rules
- Trade licence from the local body
§6Schemes & subsidies
- PMEGPCentralActive15–35% subsidy
- MudraCentralActiveLoan up to ₹20 lakh, no collateral
- CGTMSECentralActiveNo collateral, up to ₹10 crore
- Stand-Up IndiaCentralClosed₹10 lakh – ₹1 crore loan
PMEGP fits the project size; MUDRA covers loans up to ₹20 L; CGTMSE for loans without collateral; Stand-Up India for SC/ST or women founders.
§7Money
How the investment is worked out: DC-MSME profile (SISI Jaipur, May 2002): fixed capital ₹2.50 L (furnaces, sieve, hoist, testing, installation, moulds, furniture, pre-operative) + working capital for 3 months ₹23.65 L = ₹26.15 L. Shed of 50 × 50 ft rented at ₹5,000 a month.
Working capital: Working capital is ₹23.65 L for 3 months — almost all of it is aluminium scrap (10 MT a month at ₹70 a kg). The machinery itself costs only ₹2.50 L.
Prices from 2002 — machinery, raw material and wage costs will be much higher now.
§8Export potential
Confirm the HS code in the DGFT ITC(HS) lookup before you export
Export council / board: EEPC India
- The profile prints no HS code; confirm the 8-digit ITC(HS) line for shots and notched bars with DGFT or a customs broker.
- The trade is mostly with steel plants inside India.
§9Risks — where people fail
- Aluminium scrap price swings
- Slow payment from large steel plants
- Iron contamination leading to rejected lots
- Air pollution complaints from furnace smoke
§1030 / 60 / 90-day plan
A general plan that applies to any business. A plan for this business will be added after research.
- Days 1–30: Visit a working aluminium shots and notched bars (steel deoxidiser) unit, ask 10 buyers about price and quantity, and get quotations from 3 suppliers.
- Days 31–60: Udyam and the licences you need (Udyam registration, GST), a project report (DPR), and the scheme or loan file.
- Days 61–90: Space and machines, trial production, and first deliveries to 10 customers.
§11Who to connect with
Associations, clusters and training institutes — the directory is being built. Connect
§12Watch
There is no episode on this business yet. Shows are coming soon on the Podcast page.
Want to start Aluminium Shots and Notched Bars (Steel Deoxidiser)?
DPR, loan file or registration — ask us on WhatsApp.
¶Sources
Data review: 6 October 2026. Spotted a mistake? Report it. For information only — not legal or financial advice.