Smelters cry foul over sulphuric acid dumping

Manufacturers of sulphuric acid have raised concern over the dumping of the chemical by Korean and Japanese firms at a twentieth of the freight on board (FOB) price.

Several firms, led by Sterlite Industries, Hindalco and Hindustan Zinc, have filed a petition with the directorate of anti-dumping in the commerce ministry seeking an immediate imposition of anti-dumping duty on the acid. The companies claim that the FOB price of the acid is over $60 per tonne, while it is being dumped at $3 per tonne.

The bulk of the 6.5 million tonne of the acid produced in India comes from zinc and copper smelters. The acid is used in the chemicals and fertiliser industries.

With the acid being available at a fraction of the domestic cost of production, domestic manufacturers are finding it difficult to sell their output.

Officials at Aarti Industries, one of the petitioners, said the company produced 68,032 tonne of sulphuric acid in the 2008-09, but managed to sell only 38,309 tonne. Indian Rayon produced 28,949 tonne of acid and sold just 11,530 tonne in the period.

“In view of low-cost imports/dumping of sulphuric acid into our country, we are facing serious evacuation problems as sulphuric acid is a hazardous liquid that cannot be drained off. We are thus forced to sell the acid at extremely low price, resulting in huge losses to us,” said an official with a smelter company.

The Fertiliser Week, in its report on the global fertiliser market on June 11, wrote. “(In India) the most recent price paid for Korean and Japanese acid is claimed at $2.50 per tonne CFR (cost + freight)….Iffco reports to have imported a total of 3,60,000 tonne of acid for its Paradeep Phosphates unit between April 2008 and March 2009.”

Analysts fear the situation could get worse for local manufacturers of the acid. Sulphuric acid production in India has grown by 150% since 2005-06. It is poised for a quantum increase with the expansion plans in copper, zinc and lead smelters,” said an analyst.

The situation could get worse if China, which is also facing a similar problem, imposes anti-dumping duty. “Chinese smelters met the ministry official some time back and appealed for imposition of anti-dumping duty on the product,” said an analyst tracking the fertiliser sector.

“If the (Chinese) government slaps import tax on the acid and if less is exported to China, the product will only need to go somewhere else (India),” The Fertiliser Week report said.

The smelter firms are also unhappy that the government is only listening to the concerns of the fertiliser industry. They argue that when sulphuric acid prices were rising, the government stepped in to help out the fertiliser firms, but now, when prices are down, the government is not helping the smelters.

“Last year, when the sulphuric acid prices were spiralling up, the smelters had offered fertiliser firms the first right of refusal to offtake the material, thus losing out on export opportunities,” said an official from a leading copper smelting company said.