Coke manufacturers appeal for raising import duty on met coke following heavy dumping by China

KOLKATA: Manufacturers of metallurgical coke have sought an increase of at least 20% in import duty on the steel-making raw material to tackle dumping from China.
Metallurgical coke, also called met coke, is used for heating blast furnaces in steel units.

“The coke manufacturing sector is currently battling against twin odds -- indiscriminate dumping by China and an inverted duty structure further to the announcements in the last budget,” the Indian Met Coke Manufacturers’ Association said in a statement.

The association said that “while concerns related to dumping are being taken up by the domestic industry body as per the prescribed procedures separately, the industry urges the government to correct the anomalies in duty structure on an immediate basis to ensure its survival”.

Met coke is use by steel producers other than integrated steel mills, chemical industries and foundries, and ferro alloy makers, among others.

India’s merchant met coke industry, which has an installed capacity of about 10 million tonnes, provides sustenance to over 1 million workers. About Rs 30,000 crore has been invested in the facilities.

The association has alleged that China has resumed dumping of met coke. In 2004, it had set export duty at 5%, then raised it to 15% and subsequently to 40% in 2008. This duty was brought down to zero in January 2013. Since then, Chinese coke has flooded the Indian market.

According to Resource-Net, a leading global observer of carbon products, China’s coke industry has over capacity and is making sales at below cost, putting pressure on the Indian met coke industry. Companies like Gujarat NRE Coke and Saurasthra Fuels are under financial stress and have been referred for Corporate Debt Restructuring (CDR). This is because the market price of met coke is at times lower than the variable cost of production.

“Indian coke imports in the first half were 2.2 mt, of which half came from China. End-users are buying Chinese coke instead of domestic production,” Resource-Net said in a recent report. “The import duty on met coke also stands at 2.5% today, same as that of coking coal. The import duty on met coke should be higher than that of coking coal since it is a value-added product and the value addition is being done in the country by domestic Industry.”