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Met coke makers call for increasing import duty

December 2: The Indian Met Coke Manufacturers’ Association (IMCOM) has appealed to the government for raising the import duty on met coke to at least 20% to ensure its survival.

The industry is currently battling against twin odds: indiscriminate dumping by China and an inverted duty structure further to the announcements in the last budget, IMCOM said in a statement.

IMCOM alleged that “Currently, China has started dumping again. In 2004, China had put up an export duty that was initially fixed at 5%, increased to 15% later and subsequently raised to 40% in 2008. This duty was brought down to zero in January 2013. Since then Chinese coke has started flooding the Indian market.”

According to industry association, Chinese coke industry has over capacity and is making sales at below cost. This has left the industry reeling severely under stress and major coke producers like Gujarat NRE Coke Ltd, Saurasthra Fuels have already have been referred to Corporate Debt Restructuring (CDR) because market price of coke is at times even lower than the variable cost of production.

According to the association, Chinese metallurgical coke became a key feature in seaborne market after the removal of export tariffs in 2013. Export volumes from China between January and September 2014 have more than doubled year-on-year to 5.78 million, almost a third of which has come to India. Spot prices for coke on a delivered basis to India have also witnessed a dramatic decline amidst the onslaught of competitively priced Chinese coke.

“The import duty on met coke stands at 2.5 percent today, same as that of coking coal. As per simple logic, 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,” IMCOM said.

“Therefore, we urge the government to raise import duty on met coke to at least 20 percent,” the industry association said.

“The demand of met coke comes from steel producers (other than integrated steel mills), chemical industries, foundries, ferro alloys etc, and is met by merchant met coke manufacturers in India. The installed capacity of merchant met coke is around 10 million tons per annum in India and it provides sustenance to over 10 lakh people in the country,” according to IMCOM.