In Focus : Metallurgical Coke
Imports of metallurgical coke or popularly referred to as metcoke are again under the lens of the Indian authorities. Recently, the finance ministry extended the validity of the existing anti-dumping duty on metcoke imports from China by a year up to May 4, 2004, and the ministry of commerce initated dumping probe on Japan.
The anti-dumping measures are expected to benefit metcoke producers in the country in only a limited fashion because several major user industry categories were exempt from its applicability. Given this scenario, industry observers wonder how it will safeguard interest of other domestic users.
The move to continue with anti-dumping duty comes close on the heels of the announcement in Parliament in late April that special additional duty of customs (SAD) would not be imposed on imported metcoke used by iron and steel and ferro alloy industries.
India has several large metcoke producers like Rashtriya Ispat and Gujarat NRE Coke Ltd. User industry categories range from steel, pig iron and ferro alloys to auto components.
In the last budget the import duty on metcoke at 10 per cent was unified as against the earlier dispensation of 5 per cent or 15 per cent depending on end-use. It had led to a hue and cry that it had increased the cost of iron and steel and ferro-alloy industries. At the behest of these two user industries, the finance minister exempted metcoke imports used by them from imposition of SAD.
The government has given exemption of applicability of anti-dumping duty for import by a manufacturer of steel using COREX technology,or import by a manufacturer of pig iron using COREX technology, or import by a manufacturer of ferro-alloys.
The anti-dumping duty was also not applicable to import by a manufacturer of pig iron or steel using a blast furnace. The anti-dumping duty range from US$ 18.35 to US$ 24.95 per tonne and was imposed vide notification no.81/98 dtd.29.10.98.
A few importers along with Chinese exporters appealed to CEGAT who has subsequently upheld the anti-dumping order of DGAD vide order no.15/2000 dtd.21.1.2000. With this notification a long-standing demand by the manufacturers of steel and pig iron through blast furnace or COREX technology had been fulfilled.
It was also one of the major demands by the ferro-alloys industry who are reeling under high power cost. The exemption of anti-dumping duty would contribute towards reduction of cost of production of both pig iron and steel.
A year back, metcoke price, had gone up to $105 per tonneas against $94 per tonne two years back. Sponge iron, another major input, has seen a dramatic surge in price, to Rs 6,150 per tonne, a rise of over Rs 1,000 per tonne.
All these factors had forced most auto and automotive players to accept a price rise by alloy steel makers to raise their rates.
The reason for a rise in the price of imported metcoke was more owing to the fact that availability from one of the main suppliers, China, had come down. This was not only because of the anti-dumping duty but also because of investigations into safety norms in Chinese factories.
This has led to reduced availability and hence increased prices. China is of late, increasingly making itself open to western inspection after its entry into WTO.
For alloy steel, there existed nearly 160 medium/mini-steel plants, manufacturers, exporters and suppliers. A third tier of about 550 small units use arc/induction furnaces to melt steel scrap. They produce a total of 1.5 million tonnes of steel castings and other items.
