Indian steelmakers seek to soften proposed import curbs on key ingredients

The Indian Steel Association said in a letter, dated Aug 1, to the country's federal trade ministry that the proposed metallurgical coke import quota could hit the ramp-up of blast furnaces

Indian steelmakers want the government to soften proposed import restrictions on metallurgical coke, a key ingredient in steelmaking, saying the curbs will hit steel mills' capacity expansion, a letter from the Indian Steel Association, seen by Reuters on Friday, said.

India, the world's second-biggest producer of crude steel, in April proposed a country-specific import quota to cap annual imports of low ash metallurgical coke, also known as met coke, at 2.85 million metric tonnes for one year. The aim is to protect the country's local producers, which have complained about rising imports.

India's imports of low ash metallurgical coke have surged more than 61 per cent over the past four years.

The Indian Steel Association said in the letter, dated Aug. 1, to the country's federal trade ministry that the proposed metallurgical coke import quota could hit the ramp-up of blast furnaces.

India's steel capacity is likely to rise by about 14 million metric tonnes a year, according to the association.

In the letter, the steelmakers urged the government to exempt metallurgical coke imports with up to 12.5 per cent ash content from the planned curbs and also to remove country-specific restrictions on import of the coke with ash content of more than 12.5 per cent.

The steel industry body also said local coke production is not sufficient to meet steel mills' needs for metallurgical coke with "consistent and homogenous" quality.

"Permitting only 2.85 million metric tonnes of met coke imports will not even meet the steel industry's capacity addition requirements," the association said.

The Indian Steel Association did not immediately respond to a Reuters' request for comment.

A senior government source said the issue of quantitative restrictions on metallurgical coke with ash content of 12.5 per cent and above is being examined by the Trade Ministry in consultation with different stakeholders.

"An appropriate decision will be taken by the government keeping in view the stakeholders interest and investigation findings of DGTR (Directorate General of Trade Remedies)."

The steel industry body, whose members include major steelmakers such as JSW Steel, Tata Steel, ArcelorMittal Nippon Steel India and Steel Authority of India, has said if the proposed curbs are introduced they should be only for six to 12 months.

In June, Reuters had reported that ArcelorMittal Nippon Steel India had warned trade officials in New Delhi that the proposed curbs could adversely affect the steel industry.

India's steel ministry also does not favour limits on imports of metallurgical coke, citing risks to domestic output.