Import Curbs On Low Ash Metallurgical Coke Pushing Up Steel Prices: GTRI

(MENAFN- KNN India) New Delhi, Dec 26 (KNN) Restrictions on imports of Low Ash Metallurgical Coke (LAM Coke), a key input accounting for 35–40 per cent of steel production costs, are pushing up steel prices in India, according to a report released on Friday by the Global Trade Research Initiative (GTRI).

The report noted that India's reliance on imported LAM Coke is structural, as most domestically available coal contains 14–15 per cent ash and is unsuitable for efficient blast furnace steelmaking.

Policy Mismatch Raises Costs

"While the government protects domestic steelmakers through high safeguard and anti-dumping duties and Quality Control Orders on finished steel imports, it simultaneously restricts access to Low Ash Metallurgical Coke (LAM Coke), a non-substitutable input that accounts for 35-40 per cent of steel production costs," the report said, reported ANI.

GTRI observed that capping import volumes and imposing high duties on this essential input have driven up production costs, eroded competitiveness, and constrained capacity expansion, running counter to broader economic objectives.

Tightening of Import Controls

Over the past year, India has progressively tightened controls on LAM Coke imports through safeguard measures, quantitative restrictions (QRs), and provisional anti-dumping duties, creating simultaneous constraints on both volume and price.

A safeguard investigation in 2023 led to import caps, followed by country-wise QRs from January 2025 limiting imports to 1.4 million tonnes per half-year, a restriction later extended until December 2025.

In parallel, an anti-dumping probe covering Australia, China, Colombia, Indonesia, Japan, and Russia resulted in provisional duties ranging from USD 60 to USD 120 per tonne in November 2025.

Concerns Over Duty Calculations

The report flagged freight benchmarking as a major flaw in the anti-dumping investigation.

While LAM Coke is typically shipped as dry bulk with freight costs of about USD 20–25 per tonne, container freight benchmarks-reported to be eight to ten times higher-were allegedly used, inflating landed values and dumping margins. GTRI said this has resulted in duties exceeding levels justified by actual trade economics.

Impact on Supply and Prices

The effects of these measures are already visible, the report said.

In the first half of 2025, steelmakers were able to secure only around 1.5 million tonnes of metallurgical coke against demand exceeding 3 million tonnes, increasing dependence on uneven domestic supplies and raising the risk of production disruptions.

With LAM Coke accounting for roughly 38 per cent of finished steel costs, a 20–25 per cent increase in coke prices could lead to a 3–5 per cent rise in steel prices, affecting margins and competitiveness in both domestic and export markets.

Recommendations Ahead of QR Expiry

As the current QRs approach expiry at the end of 2025, GTRI recommended restoring predictable and adequate access to LAM Coke by lifting or significantly expanding quotas, avoiding overlapping controls, and recalculating duties using realistic dry-bulk freight costs.

While protecting domestic met coke producers is a valid objective, the report cautioned that layering quotas and duties on a non-substitutable input risks overcorrection with broader macroeconomic implications.

(KNN Bureau)

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