Steel ministry against anti-dumping duty on metallurgical coke imports.

Seeking relief for domestic steel manufacturers, India’s steel ministry has requested the ministry of commerce and industry to drop the ongoing anti-dumping investigation on low-ash metallurgical coke imports from Australia and China.

Anti-dumping duties are imposed if a country dumps goods in another country at a much lower rate than what it charges at home.

The investigation was initiated in December by the Directorate General of Anti-Dumping and Allied Duties (DGAD), a body under the commerce ministry.

Hard coke, commonly known as low-ash metallurgical coke, acts as a melting agent converting raw materials such as iron ore to produce steel, which is the preferred way of steel-making in India. The raw material for making hard coke is low-ash coking coal, sourced mainly from Australia, China and the US.

A senior government official, requesting anonymity, referring to a recent communication between the two ministries said since the steel sector is under stress, measures against raw materials will have an adverse impact on steel manufacturers.

However, a senior commerce ministry official, who also did not want to be named, said the investigations are over.

Taking into account the sharp increase in coking coal prices since August 2016, the steel ministry is of the opinion that the scenario has changed when initial anti-dumping duty petition was filed. It believes that the recent increase in coking coal prices could squeeze Indian steelmakers’ profitability.

“The steel ministry has said the investigations should be kept on hold and coke with ash content 12.5% and below should be excluded from any anti-dumping duties as these are not available domestically,” said the official.

This comes in the backdrop of the Rs.3.1 trillion debt-laden Indian steel industry reeling under deep financial stress due to a fall in demand and cheap imports from China. This has led to 27% of loans to the industry becoming distressed.

India has limited reserves of metallurgical coal, accounting for only 17% of the country’s proven coal reserves, and is primarily dependent on imports.

Another senior government official on condition of anonymity said any move to restrict metallurgical coke import may also affect various pig iron producers as well as the foundry industry which consumes the raw material.

According to a recent report by rating agency Fitch, the prices for hard coking coal for export by Australia as of 30 September was 125% ($100 per tonne) higher than the average in the quarter ended June 2016.

Queries emailed to the spokespersons of the ministries of steel and commerce on 13 October remained unanswered.

Experts, however, think that the government should wait and watch the international pricing scenario before taking a final call.

“Any policy decision should not be based on short-term price movement. Hence, balanced decision should be taking into account long-term prices,” said Dipesh Dipu, founder and partner at Jenissi Management Consultants, a Hyderabad-based energy and resources sector consulting firm.

Earlier this month, the government continuing its protectionist measures for the debt-laden steel industry extended minimum import price on 66 types of steel products till December.

Source : vccircle.com