The Hindu Business Line : Plea to import metcoke from China against iron ore exports

THE Southern India Engineering Manufacturers' Association (SIEMA), Coimbatore has asked the Union Government to import metallurgical coke from China against the export of iron ore from India. This is in view of the renewed spurt in the prices of coke.

The industry, which has been complaining about the hike in the price of two essential raw materials — coke and pig iron — has been stunned by the increase in their price by nearly 25 to 50per cent in a span of just one month. A further price hike seems to be in the offing.

Industry circles here say that there is a global shortage of coke and China, which is one of the major sources of quality coke, seems to be restricting its export. The shortage in availability of steam coal also seems to have hurt local pig iron producers who are reported to have increased prices to partially offset loss in production.

Speaking to Business Line, Mr G. Rajendran, President, SIEMA, said in the past five weeks, the price of pig iron had shot up from Rs 15,750 a tonne to Rs 20,200. .

The price of Chinese coke has zoomed to Rs 22,500 a tonne from Rs 14,600 in the last week of December. Even domestic coke now costs Rs 19,500 a tonne and the quality is also poor.

He said the foundry industry preferred metallurgical coke imported from China to the domestic coke since the latter contained high ash content necessitating use of 25 per cent more coke to make the same material. Dust generation also was higher, he said. With a view to protecting domestic coke producers, the Centre imposed anti-dumping duty of Rs 1,200 a tonne on Chinese coke some years ago but subsequent to the imposition of the duty, coke prices has moved up several times. He estimated that the Coimbatore foundries alone consumed around 3.5 lakh tonnes of coke per year. Coke was imported by private traders. Because of reported restrictions enforced by China on the export of coke, there was a short supply.

The SIEMA President wanted the Centre to take the initiative to negotiate with China for the import of coke. Since India was exporting a considerable quantity of iron ore to that country, it could ask for supply of coke on a bilateral basis to alleviate the problems being faced by the industries.

Mr Rajendran said that domestic manufacturers of pig iron also seem to have been hit by the shortage of steam coal from China and have been cutting back production and to offset the loss have been hiking price of pig iron. Depending on the technology used, pig iron constituted 30 per cent to 55 per cent of the raw material used by the foundries, with the balance coming from scrap and foundries' own returns. He says the price of scrap also might shoot up.

The pump and foundry units have been caught in a cleft. While the price of raw materials continue to go up, buyers of castings and other components made by the foundries frown upon any price increase to match the increase in input costs.

After the foundry industry here launched an agitation about two months ago, the price line was maintained by the pig iron and coke suppliers but only for a brief period.

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