Steel Ministry seeks removal of anti-dumping duty on met coke
What's the story
India's Ministry of Steel has requested the Finance Ministry to remove anti-dumping duties on low-ash metallurgical coke imports. The request comes after domestic supply was tightened and prices increased due to the current restrictions, Reuters reported citing government documents. The move comes months after India imposed a provisional anti-dumping duty on such imports in December for six months.
Duty impact
Steel Ministry flags burden on manufacturers
The Steel Ministry has now flagged the unintended consequences of the anti-dumping duty, saying it has disrupted supply chains and raised input costs for steelmakers across India. In a May 18 office memorandum, the ministry said "concerns have emerged regarding the limited availability of met coke in the domestic market and a substantial increase in domestic prices following the imposition of anti-dumping duty, which has imposed a significant financial burden on steel manufacturers."
Import reliance
Met coke key for steel production
Met coke is a key raw material for steel production in blast furnaces, and India heavily relies on imports to meet its demand. The country sources this fuel from several countries including China, Indonesia, Poland, Japan and Switzerland. However, industry participants have noted that import volumes have plummeted since the duty was imposed.
Operational impact
Operational challenges for RINL
The Steel Ministry also flagged the operational challenges faced by state-run Rashtriya Ispat Nigam Ltd (RINL). The company has struggled to procure enough met coke at reasonable prices from domestic suppliers, resulting in a 20% rise in input costs. This has threatened its operational viability amid a government-backed financial revival plan.
Market volatility
Concerns for small and medium-sized steelmakers
The Steel Ministry also expressed concerns for small and medium-sized steelmakers who heavily rely on merchant suppliers for their met coke needs. These companies have been particularly vulnerable to price fluctuations and supply shortages in the domestic market. The ministry noted that "The domestic market has not been able to ensure adequate availability of met coke at competitive rates to meet the requirements of the steel industry."