Specific Safeguard
Investigation against Carbon Black from China Launched on Complaint of Phillips
Carbon
Anti-dumping
on China along with Australia, Russia and Thailand for the period 2009-2014
already in place. Double levy for same item and
same country on the anvil.
[Safeguard Initiation Notification dated 2nd December
2011]
Sub: Initiation of safeguard investigation concerning imports of Carbon
Black into India from China PR.
An application has been filed
before me Under Rules 5 of the Custom Tariff (Transitional Product Specific
Safeguard Duty)Rules, 2002 by M/s. Association of
Carbon Black Manufactures, 5A Raba Kailash, 55/4 Ballygunge Circular Rd. Kolkata-700019 on behalf of two of
its member companies M/s. Phillips Carbon Black Limited, 31, Netaji Subhash Road,
Kolkata-700001, and M/s. Hi-Tech Carbon Murdhwa Indl Area, P.O. Renukoot, Dist: Sonebhadra (U.P.) for
imposition of Safeguard Duty on imports of Carbon Black into India, to protect
the domestic producers of Carbon Black against market disruption and threat of market
disruption caused by the increased imports of Carbon Black into India from
China PR.
2. Domestic Industry
The application has been filed
by M/s. Association of Carbon Black Manufactures, 5A Raba Kailash,
55/4 Ballygunge Circular Rd. Kolkata-700019 on behalf
of two of its member companies M/s. Phillips Carbon Black Limited, 31, Netaji Subhash Road, Kolkata-700001,
and M/s. Hi-Tech Carbon Murdhwa Indl
Area, P.O. Renukoot, Dist: Sonebhadra (U.P.) for imposition of Safeguard Duty on
imports of Carbon Black. The applicants account for more than 80% of the total
production of Carbon Black in India.
3. Product Involved
The product involved is ‘Carbon
Black’, classified under Customs subheading No. 28030010 under the Customs
Tariff Act, 1975. Carbon Black is also known as acetylene black, channel black,
furnace black, lamp black, thermal black, and noir de carbone.
Carbon black can be divided into two categories – rubber and non-rubber
applications Carbon black. Carbon black for rubber applications is used in
production/ processing of rubber (including tyres), as a reinforcing filler.
The present petition is in respect to increased imports of Carbon black used in
rubber applications. Carbon black used in non-rubber applications, such as inks
in copiers and computer printer cartridges, paints, crayons and polishes, is
not within the scope of the present investigation.
4. Increased Imports
Imports of Carbon Black from
People’s Republic of China into India have shown sharp increase in absolute
terms as well as in relative terms. It is also noticed that the rate of
increase in imports from People’s Republic of China is significantly higher
than that from countries other than People’s Republic of China, causing market
disruption and threat of market disruption. The data relating to imports of
Carbon Black from 2008-09 onwards till October, 2011 is as under:
|
Financial Year |
Quarter |
Total Import |
Import from China
(MT) |
Import from other
countries |
Domestic
Production (MT) |
|
2008-09 |
|
61813 |
13944 |
47869 |
416244 |
|
2009-10 |
|
71876 |
17584 |
54292 |
492863 |
|
2010-11 |
|
73146 |
18273 |
54873 |
585899 |
|
2011-12 |
Q1 |
17057 |
5789 |
11268 |
163458 |
|
|
Q2 |
34675 |
25772 |
8903 |
148188 |
|
|
OCT,11 |
12216 |
9385 |
2831 |
46582 |
|
|
Q3 |
36648 |
28155 |
8493 |
139746 |
|
2011-12 |
Annualised |
109625 |
70193 |
39432 |
614105 |
Source: DGCIS Import data from 2008-09 to 2010-11 & for rest
the Domestic Industry
The Imports of the product
under consideration have increased throughout the injury period in absolute
terms with a sharp increase in imports in the most recent period. There is a
sudden, sharp and significant increase in imports in the recent period. The Imports from China have increased
phenomenally from 13944 MT in 2008-09 to 70193 MT in 2011-12(Annualised) which
shows an increase of 429%. Imports have also increased in relation to domestic production
in India. It is noticed that the import from China with respect to domestic
production was 3% in 2008-09, which has increased significantly now to 11% in
2011-12 (Annualised).
5. Market disruption to the Domestic industry
The applicant
have claimed that the increased imports of Carbon Black have caused and
are threatening to cause market disruption to the domestic producers of Carbon
Black. The threat of market disruption is visible from the data provided by the
applicants for the period Oct-Dec 2011 as detailed below:
a) Production,: The domestic production
increased up to FY 2010-11, but declined drastically in the most recent period.
The domestic production has fallen steadily from 163458 MT in Q1 (2011-12), to
148188 MT in Quarter 2(2011-12) & further to 139746 MT in Q3(2011-12) as shown below.
Source: Domestic Industry
|
Financial Year |
Quarter |
Production (MT) |
|
2008-09 |
|
416244 |
|
2009-10 |
|
492863 |
|
2010-11 |
|
585899 |
|
2011-12 |
Q1 |
163458 |
|
|
Q2 |
148188 |
|
|
Oct,11 |
46582 |
|
|
Q3 |
139746 |
b) Capacity Utilization: Capacity utilized by the
domestic industry for production of the product under consideration for sale in
the domestic market has declined. Capacity utilization of the domestic industry
has declined significantly in the most recent period, from 90% in Q1 of 2011-12
to 77% in Q3 of 2011-12. It has also declined from 89% in 2009-10 to 85% in
2011-12 (annualized), as can be seen below:
|
Financial Year |
Quarter |
Capacity
Utilisation (%) |
|
2008-09 |
|
83 |
|
2009-10 |
|
89 |
|
2010-11 |
|
88 |
|
2011-12 |
Q1 |
90 |
|
|
Q2 |
82 |
|
|
OCT,11 |
77 |
|
|
Q3 |
77 |
|
|
Annualised |
85 |
Source: Domestic Industry
c) Market Share & Changes in levels of Sales: The market share of the
domestic industry declined as compared to the base year as well as in the most
recent period whereas share of the imports has increased significantly.
Applicants had a market share of 71% in 2010-11 which fell to 56% during Q3 of
2011-12; i.e. a decline of about 15%. During the same period, share of import
from China jumped from 3% in 2010-11 to 19% in Q3 2011-12.
|
Financial Year |
Quarter |
Total Import |
Import from China (MT) |
Import from other countries |
Production (MT) |
Sales of DI (MT) |
Sales of other Indian Producers |
Total Demand (MT) |
% of Market Share |
||
|
DI |
China Import |
Other Countries |
|||||||||
|
2008-09 |
|
61813 |
13944 |
47869 |
416244 |
322809 |
98052 |
482674 |
67 |
3 |
10 |
|
2009-10 |
|
71876 |
17584 |
54292 |
492863 |
400295 |
119391 |
591562 |
68 |
3 |
9 |
|
2010-11 |
|
73146 |
18273 |
54873 |
585899 |
443430 |
109537 |
626113 |
71 |
3 |
9 |
|
2011-12 |
Q1 |
17057 |
5789 |
11268 |
163458 |
119327 |
26073 |
162457 |
73 |
4 |
7 |
|
|
Q2 |
34675 |
25772 |
8903 |
148188 |
99206 |
33000 |
166881 |
59 |
15 |
5 |
|
|
OCT,11 |
12216 |
9385 |
2831 |
46582 |
28225 |
|
|
|
|
|
|
|
Q3 |
36647 |
28154 |
8493 |
139746 |
84675 |
30651 |
151973 |
56 |
19 |
6 |
|
Annualised |
109625 |
70193 |
39432 |
614105 |
423014 |
118783 |
651422 |
65 |
11 |
6 |
|
Source: DGCIS Import data from 2008-09 to 2010-11 & for rest
the Domestic Industry.
Though the sales of the
domestic industry increased up to FY 2010-11, it declined in the most recent
period from 443430 MT in 2010-11 to 423014 MT(annualized)
in 2011-12. So far as most recent period is concerned, sales declined in
absolute terms from 119327 MT in Q1 of 2011-12 to 84675 MT in Q3 of 2011-12.
This decline in sales is despite the fact that the demand increased
significantly. This clearly shows that the domestic industry suffered loss in
sales, market share and steep rise in inventory caused by increased imports.
d) Share of Domestic Industry in demand: It is seen from the table
above that the share of the domestic industry in demand increased till 2011-11,
but showed sharp decline in 2011-12. It slipped from 71% in 2010-11 to 65%
(annualized) in 2011-12. In absolute terms also in the most recent period [from
71% in 2010-11 to 56% in Q3 of 2011-12], the DI suffered discernible loss in
the share of demand showing market disruption and grave threat of market
disruption due to rising imports from China.
e) Profit/loss – The profitability of the
domestic industry has steeply deteriorated and the domestic industry is now
suffering financial losses. This is evident from the table below:-
|
Financial Year |
Quarter |
Profitability
(indexed) |
|
|
|
(Rs./MT) |
|
2008-09 |
|
-100 |
|
2009-10 |
|
95.53 |
|
2010-11 |
|
51.02 |
|
2011-12 |
Q1 |
41.20 |
|
|
Q2 |
18.31 |
|
|
Q3 |
-4.01 |
Source: Domestic Industry
From a position of profit in
2009-10 (95.53), the condition has deteriorated and the DI has slipped into the
position of loss in the recent period (-4.01 in Q3 of 2011-12), a decline of cent percent.
f) Inventories – The inventories with the
domestic industry have increased significantly. The table below depicts the
inventory levels which have witnessed a massive surge from 3912 MT in 2008-09
to 11600 MT in Q2 of 2011-12 and further to 17249 MT in October, 2011, almost
four times in 2011-12 from the 2008-09 level, reflecting the plight of the
domestic industry.
|
Financial Year |
Quarter |
Inventory (MT) |
|
2008-09 |
|
3912 |
|
2009-10 |
|
7594 |
|
2010-11 |
|
8678 |
|
2011-12 |
Q1 |
7902 |
|
|
Q2 |
11600 |
|
|
OCT,11 |
17249 |
Source: Domestic Industry
Domestic Industry has been
forced to shut down the production for prolonged period due to accumulation of
high stocks.
g) Productivity & Employment: There is no significant change
in the level of employment but productivity has gone down during the most
recent period.
|
Financial Year |
Quarter |
Production (MT) |
Employment (Nos) |
Productivity |
|
2008-09 |
|
416244 |
1057 |
394 |
|
2009-10 |
|
492863 |
1133 |
435 |
|
2010-11 |
|
585899 |
1280 |
458 |
|
2011-12 |
Q1 |
163458 |
1295 |
126 |
|
|
Q2 |
148188 |
1291 |
115 |
|
|
Oct,11 |
46582 |
1293 |
|
|
|
Q3 |
139746 |
1293 |
108 |
Source: Domestic Industry
6. The domestic industry has requested in their application for
immediate imposition of Safeguard duty on imports of Carbon Black originating
from People’s Republic of China for a period of four years. They have also
requested for imposition of provisional safeguard duty in view of the steep
deterioration in performance of the domestic industry due to market disruption and
the threat of market disruption as a result of increased imports of the product
under consideration from China P. R.
7. The application has been examined and it has been found that prima
facie increased imports of Carbon Black have caused and are threatening to
cause market disruption to the domestic producers of Carbon Black and as such
it has been decided to initiate an investigation in the matter through this
notice.
8. All interested parties may make their views known within a period
of 30 days from the date of this notice to:
The Director General (Safeguards)
Bhai Vir
Singh Sahitya Sadan; 2nd
Floor,
Bhai Vir
Singh Marg,
Gole Market, New Delhi-110 001,
INDIA.
Telephone: 011- 23741537
FAX: 011-23741542
E-mail: dgsafeguards@nic.in
9. All known interested parties are also being addressed separately.
10. Any other party to the investigation who wishes to be considered as
an interested party may submit its request so as to reach the Director General
(Safeguards) on the aforementioned address within 21 days from the date of this
notice.