The Hindu Business Line : Higher metcoke cost not to push up steel prices, says Sajjan Jindal

New Delhi, Aug 19 The sudden increase in the export duty of metallurgical coke (metcoke) by China from 25 per cent to 40 per cent is unlikely to result in an immediate increase in domestic steel prices, particularly in view of softening global steel prices.

Indian steel manufacturers feel that the Government should take measures to counter Chinese efforts that are leading to higher input cost for the domestic industry and that India should take policy initiatives for value addition of non-renewable natural resources within the country by taking a cue from China only.

Chinese imports

India currently imports metcoke from China at a price band of $650-800 a tonne and exports iron ore.

One tonne of steel manufacturing requires 550-600 kg of metcoke. According to estimates provided by industry officials, the net increase in production cost of steel because of higher Chinese duty would be around $70-74 a tonne.

However, major public sector steel producers such as Steel Authority of India Ltd (SAIL) and the Rasthriya Ispat Nigam Ltd (RINL) do not import from China and meet most of their requirement from Australia and source some portion from the spot markets.

It is mostly private sector steel companies which source from China.

The Vice-Chairman and Managing Director of JSW Steel and the President of Assocham, Mr Sajjan Jindal, said:“China has taken continuous fiscal measures for bringing down coking coal exports and insisted on value addition within China. But India continues to export iron ore to China without value addition. It is for the Government to take a cue from Chinese policies on how to increase value addition of natural resources within the country.”

On steel prices, Mr Jindal said, “globally prices are softening. Imports are happening and this year around six to seven million tonnes of steel are likely to be imported. So there is not much pressure on the industry to increase prices.”

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