Mumbai, Oct 12 (Agencies): The seamless pipe industry in India is staring at a large-scale job cuts and plants shutdown due to cheap dumping by China into the domestic market. Maharashtra Seamless, the country’s largest producer, has shut down one of its units at Raigarh in Maharashtra, leaving nearly 500 unemployed. 

Attributing the forced closure to an unprecedented scenario where Chinese pipes are being imported into India at less than the raw material prices, a senior company official said that shutdown of its two other units could not be ruled out. 

“Following some months of hard times, we took the path of retrenchment. Last month, we laid off about 400-500 people. This is just the beginning and we may have to follow suit in other units also,” the official said. 

The official said Chinese firms, under pressure due to worldwide trade barriers and huge unutilised capacity, have resorted to dumping huge quantities of seamless pipes into India where no restrictions are in place. 

A report says China is catering to 85% of seamless pipe sales in India. 

Maharashtra Seamless, with around 5.5 LT annual capacity, employs around 5,000 workers.
The company had recorded around R240 crore revenue in the April-June quarter and the contribution of the seamless division was close to 80%. The closed unit, which used to produce 6-inch diameter pipes, used to contribute around 15% of the revenue. 

The domestic pipe industry, which has 15 LT annual capacities, is facing the consequences. With their share in the domestic sales coming down to 15% and capacity utilisation at an all-time low of just 25% for the last one year, the seamless industry today finds itself without a market in its own country. 

In recent large volume tenders of national oil company’s covering their annual requirement for 2015-16, Chinese mills have grabbed the entire order of close to one LT at prices lower than even the cost of raw material in India. No Indian manufacturer could get even a single ton of order in these tenders,” said Sandeep Sarkar, spokesperson, Association of Seamless Pipes & Tubes. 

While domestic seamless pipes are available at around R48,000-50,000 per tonne, the Chinese products are available in India at around R25,000-30,000 a tonne, Sarkar added. 

Sarkar said, “All major domestic manufacturers like MSL, ISMT and Jindal SAW have cut production drastically in the face of paucity of orders from the domestic market. In fact, MSL has shut down one of its plants and already started notifying workers about the unviability of production in the face of relentless dumping of cheap seamless pipes into India.” 

Domestic manufacturers state that unless a high anti-dumping duty on imports of seamless pipes from China PR is not imposed immediately, the seamless pipe mills in India are surely going to die their deaths soon, he added.