IREFCON 2016: China’s refractories exports flooding Indian market

China’s glut of refractory products and subsequent dumping in export markets is subduing India’s growth potential, with domestic players facing trading pressure as buyers opt for cheaper Chinese material.
Despite the Indian steel industry registering strong growth in recent years, refractories suppliers continue to bear the brunt of low-cost imports of Chinese material, leading to inventory stockpiles.
This is contributing further to overcapacity in the sector, which is currently estimated at about 30%.
Refractories manufacturers attending the International Refractories Congress (IREFCON) 2016 conference in Hydrabad, India, today, highlighted that, with the slowing global economy impacting commodities demand, the industry is seeking low-cost substitutes and supply sources, an area in which China is aggressively pursuing more market share.
«Not only refractory raw materials, but even with finished steel brick linings into India, after including all the logistics costs associated, it is Indian rupee (INR) 12-15/kg ($0.17-0.22*) cheaper [to import from China] than buying from domestic suppliers,» a representative from OCL India Ltd told IM.
The spokesperson added that there is a gap of around INR 19,000/tonne ($280/tonne) in prices between steel produced in India and imported material.
Some of the refractories manufacturers also contested the quality of domestically produced material, saying that Indian ores do not meet the standards required by the steel industry, while Chinese material is comparatively better for use in downstream applications.
«We have been sourcing alumina from China and the grades are better than domestic suppliers, with cheaper prices as an added bonus, allowing us to supply high quality refractory products at cheaper prices to our customers,» Barundeb Chatterjee, a manager at National Refractory Corp., told IM.
A delegate representing India-based Ashapura Group, dismissed this suggestion, however, telling IM that the grades produced by Ashapura are completely different to the ones produced in China, which has allowed the company to retain its profits, albeit at lower levels.
Several producers also commented on China’s currency devaluation, noting that it had benefitted the country’s export market, with a number of industry players anticipating a further drop of 15% in the value of the Chinese renminbi by the second quarter of 2016 – putting further pressure on existing trades.
Nevertheless, Dharmesh Joshi, associate vice president at Eirich India, remained positive in his outlook, telling IM that the issue of Chinese exports has been brought to the attention of the central government and an anti-dumping duty is likely to be introduced against low-cost imports.
However, Indian producers remain concerned that, should the situation continue, there will be no level playing field for domestic companies.