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Cheap imports hit Indian merchant met coke-makers

February 11: Indian merchant coke-makers are facing a bleak future following a sharp surge in imports of the material at a much lower price and have urged the government to intervene and impose a higher duty on such entries into the country.

“From an average capacity utilisation of around 80%, the industry is today operating at 25-30% capacity utilisation and suffering huge losses due to decreasing sales and continuous fall in prices to match very low import prices,” officials from at least two leading coke manufacturers told ICMW.

The industry recently made representations to the government for increase in import duty to at least 10% from the current 2.5% as an immediate measure to ensure its survival.

The installed capacity under merchant met coke category in India is around 10 million tons per annum (mtpa) and most of the plants are located in the seven states of West Bengal, Jharkhand, Odisha, Karnataka, Andhra Pradesh and Gujarat.

The total domestic met coke demand in India is currently around 40 mtpa  of which 33 mtpa comes from integrated steel plants (ISPs) of Tata Steel, SAIL, JSW, JSPL and others, while the balance 7 mtpa is met through merchant coke makers and imports.

According to an estimate, India’s current import of met coke is about 4 mtpa, leaving only around 2.5 to 3.0 mtpa for merchant coke-makers.

“The domestic merchant met coke industry, despite having the required capacity to meet the current and any future demand of coke in India, is today forced to operate at around 25% capacity utilisation due to the surge in cheap imports, primarily from China,” the officials said.

They pointed out that the current price of imported met coke is around $186 per ton CIF, which is much lower than the cost of raw material (imported coking coal) required for making that grade of met coke in India.

The officials said the current cost of imported coking coal is around $125 per ton CIF and landed cost at the plant works out to $140 per ton. As the yield of coke per ton of coking coal is 70%, the cost of coking coal per ton of coke itself works out at $200 per ton, they said.

“In view of the above, it is clear that the merchant coke industry requires urgent measures from the government by protecting it from the menace of dirt cheap imports as well as an opportunity to operate and make it self-reliant to be able to service its debts,” the official added.