KOLKATA: China’s crackdown on polluting factories has hit India’s imports of refractory material, with the steel, cement, aluminium and glass industries facing the heat.
The new environment tax policy in China has forced raw material suppliers there to scale down production, which has affected even the availability of finished goods. India’s refractory industry sources almost half of its raw material from China and is now bracing for a shortage that could adversely impact the construction of railway tracks, buildings, automobiles, trains and ships and even items like cutlery, surgical equipment and reading glasses.
Refractory products are vital element in all high-temperature processes such as making metals, glass and ceramics, production of cement and petrochemical processes. India currently imports refractory raw material including graphite, fused and calcined alumina and high-grade clays from China in addition to magnesite, a critical input for refractory bricks.
Pollution control measures in China have intensified since the beginning of May, with Beijing shutting down most bauxite mines in Shanxi and Guizhou provinces. Calcining and processing plants in Shanxi and Tianjin have also been impacted.
This has led to a slump in the import of raw material from China, leaving domestic refractory makers struggling to meet demand from key user industries such as steel, glass, cement and aluminium. The steel industry accounts about 75% of consumption, with cement (12%), non-ferrous (6%) petrochemicals (4-5%) and glass (3%) making up the remainder.
“It is a wake-up call for the refractory industry in India,” said Hakimuddin Ali, chairman of Indian Refractory Makers Association. “We reviewed the crisis and made an assessment of the situation likely to emerge in the near future due to our over-dependence on China. For the first time, we have also initiated a dialogue with the steel and mines ministries to explore and develop alternative sources of raw materials and mines in India.”
The domestic refractory industry’s capacity utilisation is about 60%. However, about a fifth of finished refractory products are imported from China, accounting for Rs 1,200-1,300 crore of the Rs 6,000 crore refractory industry.
The association is working to develop other raw material sources. It is engaging with the government and scouting for alternative supplies from Brazil and Europe. It is also in talks with IIT (BHU), Varanasi for setting up a refractory centre of excellence at the institute to develop alternative products and raw material, said Ali, who is managing director of Calderys India, an arm of French MNC Imerys and one of the largest domestic refractory companies.
The association has urged the government to rationalise the duty structure because the present system makes imported finished products cheaper than those made in India with raw material sourced from overseas. It wants incentives to boost domestic processing, developing more applications to ensure a bigger market for local refractory makers and encourage local manufacturing of some raw materials as par ..
Source: economictimes.indiatimes.com