Pet coke import ban is likely to affect aluminium, steel industry

The Union Commerce Ministry’s notification prohibiting import of pet coke is likely to hit the aluminium and steel manufacturers.

While aluminium industry estimates the cost impact at about 50 dollars per tonne, the secondary steel manufacturers apprehend significant escalation in cost of production as they have to look for alternate fuel feed for their electric arc furnaces.

However, large steel mills, using the blast furnace route for steel making, are insulated as they do not have much use of pet coke in their process.

Major aluminium makers Vedanta, Hindalco and Nalco import pet coke to make anodes for use in the smelters for electrolytic process to separate aluminium.

“In the absence of pet coke to make anodes in-house, the companies will be forced to import anodes which will scale up the metal making cost by  40 to 50 dollars per tonne”, said an official of a leading aluminium firm.

On the other hand, a steel industry source said, the pet coke used in the steel melting shop are of high quality containing low impurities like sulphur. “Such high quality pet coke import is not banned. Hence, there won’t be much impact on the large steel mills producing high grade steel”, he added.  

Though the notification issued by Director General of Foreign Trade (DGFT) under the Commerce Ministry has prohibited import of pet coke for fuel purpose, it has exempted the ban for certain category of industries, including cement which is the largest importer of pet coke in the country.

“Import of pet coke is allowed for only cement, lime kiln, calcium carbide and gasification industries when used as feed stock or in the manufacturing process on actual user condition”, said the notification.

DGFT notification follows a ruling of the Supreme Court last month that agreed to put into place recommendations from the court-appointed Environment Pollution Prevention & Control Authority (EPCA) to limit imports only to those industries using coke as a feedstock or in the manufacturing process, not as a fuel.

The Petroleum and Natural Gas Ministry has also supported ban on import of pet coke with high sulphur content as burning of it releases large amount of carbon dioxide and sulphur dioxide.

Meanwhile, the aluminium industry is hopeful of getting relief in the next batch of hearing on the matter as the government is conducting studies for submission to the court on adverse impact of use of anodes built from imported pet coke in smelter pots.

In its July ruling, the court said, the decision on the use of imported pet coke in the steel industry and aluminium industry is under consideration. We are informed by the learned ASG (Additional Solicitor General) that studies will have to be conducted and BIS standards have to be fixed in the case of aluminium industry.

As this exercise may take about eight weeks, the court has granted time till 1st October, 2018 for a decision on the matter.