Caustic soda makers say anti-dumping duty won't help much

This, as domestic prices are lower than that in international markets

The caustic soda sector heaved a sigh of relief even as the finance ministry imposed definitive anti-dumping duty (ADD) on the commodity's imports from China and South Korea. According to caustic soda producers, the move will help in controlling dumping from these countries. However, they say the industry will not benefit much instantly as the domestic price of caustic soda is lower than international market.

The petition seeking anti-dumping duty on caustic soda imports from these two countries was filed by Alkali Manufacturers’ Association of India.The government has imposed an anti-dumping duty of up to $48.4 a tonne depending on the producer and country of export (China or South Korea).

“These countries have surplus capacity and demand is also not much, which gets translated as dumping in India. After imposing duty, dumping will get corrected to some extent. This has come as a relief for the industry,” said Ramkumar Shankar, president of Alkali Manufacturers’ Association of India.

Caustic soda is mainly used in the manufacture of pulp and paper, newsprint, viscose yarn, staple fibre, aluminium, cotton, textiles, toilet and laundry soaps, detergents, dyestuffs, drugs and pharmaceuticals, petroleum refining, etc.

India’s manufacturing capacity is estimated to be three million tonnes a year, while its utilisation is 80 per cent. The country had imported 550,000 tonnes caustic soda in 2014-15 against 400,000 tonnes in 2013-14.

“30,000-40,000 tonnes of caustic soda have been dumped every month in India from various producing countries,” said a top executive with a leading caustic soda firm.

Prices of caustic soda in domestic market are ruling at Rs 23,000 a tonne, whereas international prices are Rs 27,000 a tonne.

The soda ash sector is already gearing up for capacity expansion even as it prepares for the end of ADD's term in 2017. The industry intends to get domestic capacities up and running before the anti-dumping duty is lifted.

“Currently, soda ash is internationally priced at $300-310 A tonne.  The gap between demand versus domestic supply of around 700,000 tonnes is being fed from imports. However, expansions are coming up and in few years, the domestic capacities should be sufficient to meet the soda ash demand," said RS Jalan, managing director of GHCL.