| Date: |
23-09-2015 |
| Subject: |
ISMT, Maharashtra Seamless, Jindal Saw claim seamless pipe industry bleeding due to Chinese dumping |
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MUMBAI: Indian seamless tube makers, ISMT, Maharashtra Seamless and Jindal Saw, have reduced production to a quarter of their capacity and fear closure of units unless the government imposes anti-dumping duty to protect them from the threat from China.
Industry reports revealed that the three major players, which have a combined installed capacity of 1.075 million tonnes a year have seen capacity utilization dropping to 25% from 50% in 2011-12, which makes it difficult for the industry to sustain.
"Chinese exporters have become extremely aggressive in the Indian market and in addition to 'dumping' the Indian market with products at ridiculously low prices, they have been grabbing almost all the large volume project orders from public sector units and private sector projects in the oil and power sectors," Rakesh Duda, executive vice president (corporate), ISMT told ET.
"It is ironical that while the government is aggressively articulating its 'Make in India' plan, its own PSUs are buying material from China at dumped prices and as a consequence strangulating the domestic industry which for the last four decades has served and partnered with the user industry," Duda said.
Seamless tubes are primarily used in oil, power, automobiles, mining and construction. According to experts, the per ton capital cost for setting up of a seamless tube plant is substantially higher that of steel. Industry executives said that the demand for the product has shrunk dramatically due to the slowdown in industrial capex. The problem is aggravated by the fact that China alone captures 46% of the market as the country offers rates significantly lower than Indian manufacturers.
Indian demand for seamless tubes dropped to 6.31 lac tonnes in 2013-14 from about 8.14 lac tonnes in 2011-12. In the same period, Chinese imports increased to 46% from 40%.
Indian makers on an average offer these pipes at Rs 84,000 a ton while Chinese makers are able to sell it at around Rs 25,000 a ton, according to industry data.
The government imposed a safeguard duty of 20% for one year in August 2014, which according to industry executives had no impact on imports as China reduced prices by more than 25% to offset impact.
In a representation to the government, the industry said that the Chinese products are available at "irrational prices", which is even lower than the cost of raw material for Indian manufacturers and almost all PSU tender based orders going to the Chinese manufacturers. They said that this cannot be attributed to efficiency of Chinese producers as most countries have imposed anti-dumping duty on Chinese seamless tubes and so the country is dumping in India. Indian manufacturers said that they are contemplating lay-offs and closure as the current business environment is making them bleed.
Source : economictimes.indiatimes.com
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