India initiates safeguard investigation on metcoke imports

India has initiated a safeguard investigation on imports of metallurgical coke to review its impact on domestic coke producers, according to a gazette notification published June 30.

According to the notification, the Directorate General of Trade Remedies will investigate the imports of metcoke with ash content below 18% between April 2022 and March 2023 following a petition filed by BLA Coke Pvt. Ltd., Jindal Coke Ltd., Saurashtra Fuels Pvt. Ltd., Vedanta Malco Energy Ltd., and Visa Coke Ltd. to impose a one-year quantitative restriction.

According to the petitioners, imports surged owing to an increase in coal prices following the Russia-Ukraine conflict and coke producers in regions like Australia, China and Indonesia remaining unimpacted by bullish freight rates in the post-COVID-19 restrictions phase, when global shipping rates skyrocketed, the notification said.

The notification also stated that the trade authority will be open to receiving any information regarding the investigation for a period of 30 days from the date of receipt of the notice.

S&P Global Commodity Insights reported May 5 that the Indian Metallurgical Coke Manufacturer's Association asked the trade authority to impose safeguard restrictions on imported coke as competitive seaborne options hurt domestic sales.

Between April and December last year, total coke imports stood at 120,498.50 mt, up 176.55% on the year, with Poland being the top importer, according to customs data. Between January and March this year, imports stood at 15,680.60 mt with China being the top seller.

The price of CSR 65/63 coke averaged $528.20/mt on CFR India basis between March and December 2022 against $482.80/mt CFR levels over the corresponding period in the previous year, according to S&P Global data. The prices averaged $440.45/mt CFR between January and March this year against $637.70/mt CFR over the corresponding period in the previous year.

The domestic coke prices have hovered within the range of Rupee 36,000-38,000/mt ex-plant [$439.95/mt] since the beginning of this year, according to sources.

According to market sources, merchant cokeries in India have been operating at lower capacity amid sluggish demand for the domestic fuel and elevated raw material costs. While some coke plants temporarily shut operations during the time period, some others continued to operate at lower capacities due to the financial impact of restarting a plant after shutting it down.

Coke producers in India have resorted to diversifying their coal basket by sourcing cheaper second tier coal from destinations like the US, Ukraine, Russia and New Zealand besides Australia as Australian premium mid-vol coal prices remained elevated.

The Platts benchmark Premium low-vol hard coking coal FOB price averaged $359.80/mt between January 2022 and March 2023 against $277.45/mt FOB levels during the corresponding period of the previous year.