Steel, ferro alloy makers oppose bid to impose dumping duty on met coke

Suresh P Iyengar Mumbai | Updated on January 15, 2018

Any import duty on met coke will push up steel prices by ₹700-1,500 a tonne, says industry   -  Bloomberg

‘Local industry not capable of producing low-ash fuel’

Steel companies and ferro alloy manufacturers have objected to the anti-dumping duty being planned by the Centre on metallurgical coke imported from Australia and China.

Late last month, the Directorate-General of Anti-Dumping completed its investigation on the issue and recommended import duty of $25 a tonne on metallurgical coke coming from China and $16 a tonne on coke imported from Australia.

In a letter addressed to Aruna Sharma, Secretary, Ministry of Steel, the Indian Ferro Alloy Producers’ Association said the indigenous met coke industry is not capable of producing low ash metallurgical coke with ash content less than 12.5 per cent and phosphorous content less than 0.18 per cent, which is an absolute pre-requisite for use in ferro alloy production.

Any high ash met coke will technically damage the furnaces and the consumption of coke and fluxes will be very high leading to high operating cost, said JK Chatterjee, Secretary-General, Indian Ferro Alloy Producers’ Association.

Imposing import duty on met coke will deny the ferro alloy industry level playing field with other producers.

Levy of import duty, will lead to closure of ferro alloys industries, largely in tribal areas of Chhattisgarh, Andhra Pradesh, Odisha and West Bengal and levy of anti-dumping duty will create socio-economic problems in these States. In the last three months, met coke prices have doubled. The ferro alloy industry is fighting the impact of signing a free trade agreement with Malaysia and is expecting a deluge of import of low-cost ferro alloys.

Higher power cost

The power tariff in Malaysia is about ₹2.13 a unit while the same in India is about ₹5-6 a unit. This apart, devaluation of currencies in major ferro allow producing countries such as Kazaksthan, Ukraine and South Africa has put them at an advantage.

In contrast, in India, power cost has been increasing for ferro alloy industry due to cross subsidy and incentive under Merchandise Exports from India Scheme and the recent increase of electricity duty by various States producing ferro alloys has also put pressure on the industry.

A dumping duty on met coke imported from China and Australia will have a catastrophic effect on the industry, he said.

Price hike

In a letter to the Government, Sanak Mishra, Secretary General, Indian Steel Association, said met coke cost in overall crude steel production accounts for 40-50 per cent and any import duty would push up steel prices by ₹700-1,500 a tonne.

In fact, he added met coke prices have more than doubled to $285 a tonne from $121 in January.

Given that steel industry is facing turbulent times, any anti-dumping duty will cripple the industry further, he said.

Published on November 01, 2016

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