Anti-dumping duty on met coke imports vital for the sustenance of local mfrs

Anti-dumping duty on met coke imports vital for the sustenance of local mfrs

“We disagree with ISA’s request. We need protection from the govt.”

Deepak Kumar

Worried over the dumping of Low Ash Metallurgical Coke from Australia, China, US and various other countries into the domestic market, several steel and coke industry companies reiterated their stand and urged the government to initiate an anti-dumping investigation and subsequently impose duties on the ever-growing imports of the material.

“Over the last few years, we have been witnessing a growing influx of Metallurgical Coke into the domestic market, which is causing significant damage to its domestic production and sales. The imports have grown so much, almost four-five times over the past few years, that our domestic interest is at stake. The government, together with us, needs to protect our domestic industry and encourage production and sales from the country,” said Ashish Kejriwal, Marketing Manager of Gujarat NRE Coke Ltd.

When asked about the recent request by the Indian Steel Association urging the government to desist from imposing anti-dumping duty of $16 per tonne on Australian and $25/tonne on the Chinese met coke in India, Ashish said, “We disagree with the Indian Steel Association’s request. We need protection from the government, and we would request it to take effective measures to stop the growing influx of Met Coke into the domestic market.”

Indian Metallurgical Coke Manufacturers Association (IMCOM), on behalf of several Indian steel and coke producers such as Basudha Udyog Pvt. Ltd., Bhatia Coke and Energy Ltd., Carbon Edge Industries Ltd., Gujarat NRE Coke Ltd. and Saurashtra Fuels Pvt. Ltd. had earlier this year filed an application, requesting the government to initiate an anti-dumping investigation and subsequently impose the duty on the dumping of Low Ash Metallurgical Coke from Australia and China.

These organisations claimed the influx of Met Coke from these countries, especially from China and Australia, had caused significant damage to the domestic output and domestic demand. They said that in the absence of adequate restrictive measures, the domestic output will continue to suffer. The dumping has further deteriorated sales, production, capacity utilisation, market share, inventories, number of employees, wages, profits, return oncapital employed and cash profit of the domestic industry.

Upon being asked how he felt about DGAD’s recommendations of anti-dumping duty, a Vishakhapatnam-based manufacturer of Met Coke said, “Though the quality of Met Coke from China and Australia is good, they have been flooding the market with cheaper products as a result small manufacturers like us have no option but to sell at a lower price. How do we the smaller manufacturers sustain in the market? What is worse he said, Vizag Steel plant that manufactures steel too has been selling met coke at Rs 15,000/ton which is way below the import price of Rs 24,000/ton!

In contrast to the industry’s request, The Indian Steel Association had last month urged the government to disregard any anti-dumping duty request on Met Coke as the apex body feared any such step would lead to cost escalation of their products.

 “A levy of anti-dumping duty will have a cost push effect on the steel sector. The imposition of any anti dumping duty will result in increase in the cost of finished steel by Rs.700 to Rs.1500 per tonne,” the Indian Steel Association said in its representations to the Ministry of Commerce, Steel Ministry and the Prime Minister’s Office (PMO).

Last year, the commerce ministry had initiated anti dumping investigation on inbound shipments of low ash Met Coke from Australia and China. Since the start of this investigation, Met Coke prices have almost tripled and are currently oscillating around $350 per tonne. Although there has been a surge in imports of the metal, any more imposition of anti-dumping duty will further raise the cost of steel in the domestic market.

The Steel ministry is at loggerheads with DGAD (Directorate General of anti-dumping duty) on its recommended duty of $25 per tonne on Chinese imports and $16 per tonne on the Australian imports. Incidentally the government had raised the import duty on Chinese met coke to 5% from 2.5% last year.

The Apex steel body said the imports of Met coke are required as the domestic manufacturers are unable to supply the raw material according to the specifications needed by the industry. The demand for met coke comes from ferro alloys, chemical industries and foundries and most importantly from steel producers. The installed capacity of pet coke in India is around 10 million tonnes with over 10 lakh people dependent on it as a means of livelihood.

“The steel industry in India especially with large blast furnaces of more than 1200 cubic meters necessarily requires Met Coke with high ash content and moisture content of less than 5%. Additionally such Met Coke must have low phosphorous and low sulpher content. This is required to ensure that blast furnaces run efficiently,” it said in its letter to the government bodies.

However, acknowledging the industry’s request and the damages caused by the cheap imports of coke, IMCOM said the Indian steel industry is passing through challenging times, and that the growing imports from countries like China, Japan, Russia and South Korea at predatory prices are causing irreparable damage to the domestic industry and at this point no measure should be taken that would make Indian steel uncompetitive.

Deepak Kumar - Nov 07, 2016 12:00 IST