After making a shot in the investigation of the passenger car special security, India has made a genuine move toward China's soda ash. On November 5th, the Indian Customs decided to impose a 20% special protection measure tax on soda ash originating in China and collect it on an ad valorem basis. The tax period was from April 20, 2009 to April 19, 2010.
How does India impose a 20% guarantee tax on soda ash in China?
Unexpectedly, reasonable: India's domestic production capacity has risen sharply
Wang Xiling, secretary general of the China Soda Industry Association, told reporters that as early as 10 years ago, India had carried out anti-dumping investigations and made rulings on soda ash produced in China. On June 5, 1999, the Anti-Dumping Investigation Bureau of the Ministry of Commerce and Industry of India issued an announcement stating that it should be imported from China on the application of domestic companies—Birla VXL Co., DCW, Gujarat Heavy Chemicals, and Tata Chemicals. Soda Ash initiated anti-dumping investigations. On July 11, 2000, the Anti-Dumping Investigation Bureau of India made a final ruling to impose anti-dumping duties on China's soda ash enterprises. Qingdao Soda Co., Ltd., Tianjin Ouhai Chemical Industry Co., Ltd., Dahua Chemical International Economics and Trading Co., Ltd., and Jiangsu Yongli Chemical Technology Import and Export Company have imposed anti-dumping duties ranging from 30.7% to 47.2%.
This year, China's soda ash companies have once again received “special care†from India. On January 16, on the application of the Indian Soda Industry Association, the Indian Safeguards Bureau launched a special safeguard measure for domestic soda ash. On October 6, the final decision of the Indian Safeguards Bureau confirmed that the product involved had caused damage or harm to the Indian soda industry. Despite repeatedly negotiating with relevant departments in China, India has still decided to formally levy a one-year special safeguard measure tax. Starting from April 20th, it will levy a 20% ad valorem tax on soda ash imported from China. The deadline is 2010. On the 19th. In this way, the original requirements of Indian soda ash makers have not yet been met. Previously, the Indian Soda Industry Association required the implementation of four-year safeguard measures (including safeguard tax and quantitative restrictions) on the products involved in the case in China, as well as the levy of provisional safeguard measures.
According to industry analysts, after 10 years, China's soda ash exports to India have once again encountered barriers that are unexpected but justified. The capacity of India's domestic soda ash companies is rising rapidly. According to statistics, the current total soda ash production capacity in India is about 2 million tons/year, but after the completion of expansion of India’s large-scale soda ash production companies Tata Chemicals and Gujarat Heavy Chemicals, the total production capacity of India’s soda ash is close to 2.5 million tons. The growth rate is about 25%, which does not include the expansion of production capacity of the remaining soda ash companies and the substantial increase in production capacity caused by local Indian companies acquiring foreign soda ash plants.
In 2008, after the outbreak of the global financial crisis, the real estate and auto industries continued to slump. The production of flat glass and auto glass as the main downstream of soda ash was not optimistic, and the global soda ash market was facing the predicament of oversupply. In the past two years, the local Indian market The capacity expansion of the soda ash business is fast and the market pressure is self-evident.
Regarding India’s investigation of why this is a special survey rather than anti-dumping, industry sources stated that this is because special surveys have a great advantage over anti-dumping in that they can “protect and investigate afterwardsâ€. The evaluation given by India’s “Economic Times†strongly illustrates this point: “India can take anti-dumping measures against the products involved, but due to the lengthy time of anti-dumping investigations, the Indian government has turned to consider the faster investigation procedures. Measures."
Insignificant impact, concern is not small: domestic excess capacity of 5 million tons India's ad valorem tax rate on Chinese soda ash products is as high as 20%, which means that the cost of the company's exports of soda ash products to India rose by 20%, which is basically equal to China soda was rejected from entering the Indian market.
Wang Xiling said that after India implemented anti-dumping measures against Chinese soda ash 10 years ago, Chinese companies had almost no soda ash exported to the Indian market in the past five years. After the implementation period of anti-dumping measures came to an end, Chinese soda ash producers also became cautious about the Indian market's exports. Before December 2008, the average monthly volume of soda ash exported to India was about 1,000 tons. Only from the beginning of last year, China's exports of soda ash to India rose sharply. At most, the export volume exceeded 40,000 tons in one month. After India initiated a soda ash survey and imposed temporary safeguard measures, China's soda ash exports to India fell to around 10,000 tons per month.
Compared to the domestic 5 million tons of excess production capacity, the soda ash exported to India is a trivial task. In 2008, China exported 82,000 tons of soda ash to India, accounting for only 3.85% of total exports in 2008. In the first eight months of this year, China's exports of India's soda ash amounted to 253,000 tons, an increase of 907% year-on-year, accounting for 17.2% of total exports. Among them, 14,000 tons were exported during the month of August, an increase of 143.8% year-on-year, accounting for 8.21% of the total exports for the month.
Shandong Province is a major province of China's soda ash. The six major soda ash production enterprises in Shandong have an annual production capacity of over 3 million tons, and about a third are exported abroad, but the export market is not India. Among them, Shandong Haihua Group is the largest soda ash producer in China with an annual production capacity of 2.6 million tons and an annual export volume of over 600,000 tons. The main sales market for Shandong Haihua Soda Ash is at home, and the export of soda ash is mainly concentrated in Japan, South Korea and other countries. Qingdao Soda's annual export volume of soda ash is approximately 200,000 tons. The export market is also Japan, South Korea and other places.
Liu Yan, president of the Shandong Chemical Industry Association, said that India's soda ash collection tax on China will have a certain impact on the soda ash industry in Shandong. In particular, companies in the export market relying on India will face greater pressure.
According to statistics released by Qingdao Customs, in the first eight months of this year, Shandong Port exported 100,000 tons of soda ash to India, a surge of 44.8 times, and private enterprises became the main exporters. As a result, privately-owned soda companies have been hard hit. Li Wenfeng, a researcher at the Industry Division of the Shandong Provincial Chemical Industry Association, said that the high price of soda ash in India is the main reason for attracting soda ash traders in China.
Although India's soda ash protection measures have had little impact on China's soda ash exports, it has added new concerns to the Chinese soda ash industry, which simply relies on exports to address excess capacity.
The current Chinese soda ash market is still in the doldrums. Since the fourth quarter of last year, due to the financial crisis, domestic soda ash prices have been declining. The current price is about 1100 yuan per ton, which is lower than the production cost of many soda ash companies. At present, the entire industry of the soda ash industry suffers losses, and the operating rate of enterprises is insufficient. Because the price is too low, Shandong Haihua Group, the largest soda ash producer in China, is currently at a loss. In the first quarter of 2009, it suffered a loss of 136.3 million yuan, and the operating rate of the plant was 80% to 90%. Soda ash sales pressure remained high. Overcapacity is the main reason why the soda industry is in a depressed state. As most of the domestic soda ash production capacities were gradually put into operation at the end of 2008 and early 2009, domestic soda ash production capacity has increased significantly. Statistics show that in 2009 soda ash production capacity reached 21 million tons, while domestic demand is expected to be only 16 million tons, excess capacity of nearly 24%.
It is necessary to counterattack, but also to reflect: the price war can not go abroad For the problem of excess capacity existing in the soda industry, exports in the past has always been a better solution. In 2008, China exported 2.13 million tons of soda ash, which accounted for 11.3% of the annual output. In the first eight months of 2009, 1.47 million tons were exported, a year-on-year increase of 11.1%. However, this move has not been made now. According to Zhu P, deputy director of the Information Department of the China Petroleum and Chemical Industry Association, in the past few years, China's soda ash companies mainly relied on exports to absorb some of their excess capacity. However, after the financial crisis, Chinese soda ash products have been impacted by low-priced products such as the United States in the international market. The sluggish domestic and international market demand has made it difficult for the Chinese soda ash industry to get out of the bottom. According to the analysis report of the China Petroleum and Chemical Industry Association, the operating rate of the soda ash industry in August was about 79%.
According to industry insiders, India is not very important for the Chinese soda ash export market. However, it cannot be ignored that India is China’s tenth largest trading partner. In 2008, the total import and export volume of China and India was US$51.78 billion, of which US$31.5 billion was exported, US$20.28 billion was imported, and the growth rate of imports and exports reached 34%. In China's Taiwan region, it ranks second in the top ten trading partners, and this does not include a 21.5 percentage point drop from 2007. Therefore, India’s international negative impact on any trade countermeasures in China cannot be taken seriously. Domestic soda ash companies must realize that following this large-scale survey of India’s special safeguards, other countries are likely to follow the example. After all, countries in the depths of the deep financial crisis are struggling to find ways to save themselves.
Wang Xiling stated that India once launched countermeasures against our country's soda ash products, and that our country's soda ash makers should eat a long shot. Domestic companies often do not hit the South Wall and do not look back, do not hit the blood and do not know the pain. This kind of "niu Jin" is not allowed. In addition, domestic companies must also know each other. Take our main export competitor, the United States, first of all, the US exports soda ash has a cost advantage that we cannot match. The United States mainly produces trona, and its production cost is much lower than that of China's synthetic base. Second, the United States government has only one company that can export soda ash, namely, the world’s largest exporter of soda ash, Ansake, which has a very high export price. Powerful discourse power, while our country’s soda ash exports are long and scattered, often with domestic companies forming vicious price competitions, benefiting buyers; again, because Ansake Company is the only soda ash exporter in the United States with Very good supporting facilities, with special docks and transportation forces, and the decentralized export situation of Chinese enterprises determines which company cannot build such a strong supporting facility.
After encountering such special protection, does the domestic soda ash company have more in-depth consideration of its current export strategy?
India's soda ash guarantee for China: the capacity battle in the bones
The term “special protection†has frequently impacted the visual and hearing of the Chinese people this year. After the dust of the US tire special protection project involving more than 100,000 Chinese workers was settled, Brazil, India, and other countries once followed suit and launched special security investigations on tires originating from China. As people's attention is focused on the fate of the Chinese tire industry, Soda Ash is also listed on the special insurance list.