India's caustic soda producers to seek 20% safeguard duty

30 June 2009 04:56  [Source: ICIS news]

SINGAPORE (ICIS news)-- India’s chlor-alkali manufacturers have begun to draft a proposal seeking the imposition of a 20% safeguard duty on caustic soda imports, market sources said on Tuesday.

The Alkali Manufacturers’ Association of India (AMAI) had been preparing for such a move since at least two weeks ago, a local market player said. The proposal, when completed, would be submitted to the Ministry of Commerce.

Caustic soda imports into India had surged by an average of 5,000 tonnes a month in the first three months of the year to around 25,000 tonnes a month currently, according to local media reports. The Middle East had been a major source for the caustic soda imports, an Indian caustic soda producer said.

Chlor-alkali producers in Asia, the Middle East, Europe and the US see India as an attractive export destination as domestic prices there were around $500 (€355)/tonne delivered (DEL) compared to international prices of less than $200/tonne FOB (free-on-board) northeast Asia and $100/tonne FOB  USG (US Gulf), traders and producers said.

India has already imposed anti-dumping duties on imports from numerous countries including China and Indonesia.

The main difference between anti-dumping and safeguard duties is that the former is targeted against specific exporters and results in varying rates being imposed. The latter is designed to protect the domestic industry as a whole and results in a flat rate being imposed on all imports.

Safeguard duties are also usually considered a temporary emergency measure that could be quickly approved by the government but would only be in effect for a relatively short period of time, market sources said.

India consumes around 2.3m tonnes of caustic soda a year and has an annual capacity of around 2.9m tonnes, market sources said. The only reason imports are attractive is because their prices are lower than those of domestic cargoes.

For more on caustic soda visit ICIS chemical intelligence

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By: Ng Hun Wei
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