Domestic manufacturers of seamless pipes claim capacity utilisation is down to 15 per cent and could further reduce if the governments does not protect them from cheaper Chinese imports.
The industry has been pitching for anti-dumping duty to be levied on China since January. Seamless pipes are mainly used by companies in mineral resources exploration and production.
“Nearly 85 per cent of our total sales are to ONGC. In September-August this year, the company tendered for 150,000 tonne and all of it has gone to Chinese firms. So for the next 15 months, there is unlikely to be any domestic sales,” Sandeep Sarkar, Spokesperson, Association of Seamless Pipes and Tubes and Group General Manager of Maharashtra Seamless Ltd told
Sarkar said one unit of Maharashtra Seamless has already been shut shop as its plants are running at one-fifth of the capacity to cater to an export order. “Right now, within the industry jobs are being retrenched rather than being cut. But if the situation goes worse, there will be no option but to cut jobs,” he added.
As per industry estimates, domestic seamless pipes are available at nothing less than ₹45,000 to ₹50,000 a tonne while the landed cost of Chinese imports is ₹ 25,000 – ₹ 30,000 a tonne.
While a safeguard duty of 20 per cent was levied by India in 2014, domestic manufacturers claim it has not helped as China has brought down prices further. Seamless pipes are made out of steel long products which cost between ₹30,000–₹32,000 a tonne in the domestic market.
“All around the world whether it is the US, Canada, EU, Indonesia and others, countries have imposed an anti-dumping duty on Chinese seamless pipes. We need it here immediately. The Government is aware of our situation but the process is taking time,” said Sarkar.
There are three major players in the segment, Maharashtra Seamless which is a part of the DP Jindal Group, Jindal SAW Ltd and Indian Seamless Metal Tubes Ltd. The three have invested ₹15,000 crore over the years to have a 1.5 million tonne manufacturing capacity and employ around 25,000 people directly and indirectly.