Steel ministry backs extension of import curbs on metallurgical coke

India's steel ministry favours extending import curbs on low-ash metallurgical coke because there are sufficient domestic supplies, a source familiar with the matter said, dealing a blow to steelmakers who oppose restrictions on overseas purchases.

India, the world's second-largest crude steel producer, imposed quantitative restrictions in December on imports of low-ash met coke, setting country-specific quotas and capping purchases at 1.4 million metric tons for January to June.

"We are in favour of extension because domestic capacity should be utilised," said the source, who declined to be named as deliberations were not public.

India is producing adequate amounts of met coke to meet local demand, the source said, adding that the country's annual met coke capacity is around 7 million metric tons, but only about 3 million tons are currently being produced due to a lack of demand.

Reuters in February reported that India could extend restrictions on low-ash met coke imports to encourage local steel mills to source the steelmaking ingredient from domestic suppliers.

India's steel ministry did not respond to a Reuters email requesting comment. 

The import curbs have worried major steel producers, including ArcelorMittal Nippon India and JSW Steel, who argue the restrictions will hinder their capacity expansion plans because it is difficult to source preferred grades locally.

India's Ministry of Commerce is expected to decide by next month on extending the curbs. However, backing from the steel ministry is crucial, after it intervened last year to oppose the move, leading to an extended round of deliberations before the curbs were implemented.

Last month, Commerce Minister Piyush Goyal urged steelmakers to source met coke locally.

India has also initiated an anti-dumping probe into overseas supplies of low-ash met coke from Australia, China, Colombia, Indonesia, Japan, and Russia, following a request from an industry body.

ArcelorMittal Nippon India privately warned the government it may have to severely curtail steelmaking and delay expansion plans due to the import restrictions, Reuters reported in March.

Imports of low-ash met coke have more than doubled in the past four years and major suppliers of the raw material include China, Japan, Indonesia, Poland and Switzerland.