Antidumping duty urged on steel pipe imports

JAKARTA (JP): Indonesian Chamber of Commerce and Industry chairman Aburizal Bakrie called on the government on Tuesday to impose a 50 percent antidumping duty on steel pipe imports from Japan, South Korea and China to protect local producers from unfair competition.

Bakrie said local pipe producers had been severely affected by the economic crisis and the hardship had been aggravated by the alleged dumping practices committed by steel producers from the three countries.

"The chamber has received reports from the Association of Steel Pipe Manufacturers (Gapipa) that almost all of its 15 members have been experiencing great difficulties in competition with steel pipe imports sold at prices that suggest dumping,"

"The chamber thus proposes a 50 percent antidumping duty be imposed on steel pipe imports from those countries," Bakrie said in a statement after a meeting with Gapipa executives.

Bakrie noted the proposed antidumping duty was lower than the 67 percent antidumping duty imposed by the United States government on steel pipe imports from Japan.

Referring to information from the Indonesian trade attache in Tokyo, Gapipa chairman Warasdimulya told the chamber at the meeting that Japanese steelmakers sold their pipes in Indonesia for US$540 per ton, compared with their selling price of US$1,000 per ton in Japan.

Warasdimulya said local steel producers were forced to cut their annual output to 200,000 tons from 1.5 million tons due to the weak demand amid the economic crisis.

A total of US$1 billion has been invested in the country's steel pipe sector, Warasdimulya said, adding that the bankruptcy of local steel pipe manufacturers could affect the banking sector which had provided the financing.

Local steel pipe producers, including a subsidiary of the Bakrie group, have been expecting orders from construction company PT McDermott Indonesia, which won a tender for the construction of a giant underwater natural gas pipeline linking west of Natuna island to Singapore.

But a source at McDermott recently told The Jakarta Post that the company had placed orders with a Japanese trading house for the supply of steel pipes for the pipeline project.

Gapipa charged the Japanese trading house with selling its steel pipes at prices that indicate dumping.

Bakrie called on the government to impose an antidumping duty on the Japanese steel pipes to be used by McDermott for the pipeline project.

"Given the fact that oil and gas companies are exempt from import duties, it's reasonable that the government impose an antidumping duty on imported pipes to protect the local steel pipe industry," Bakrie said.(jsk)