Initiation of Safeguard (Quantitative Restrictions) investigation concerning imports of Low Ash Metallurgical Coke in India. (30.06.2023)

Product description – The product under consideration is Low Ash Metallurgical Coke, that is, Metallurgical Coke having ash content below 18%.

HS Codes – The product is classified under Chapter 27 of the Customs Tariff Act, 1975 and is imported under various codes such 2704 0010, 2704 0020, 2704 0030 and 2704 0090.

Uses – Low Ash Metallurgical Coke is used as a primary fuel in industries where high and uniform temperature is required in the furnaces such as steel plants, chemical plants, ferro alloy plants, foundries and pig iron plants.

Applicants – BLA Coke Private Limited, Jindal Coke Limited, Saurashtra Fuels Private Limited, Vedanta Malco Energy Limited and Visa Coke Limited.

Most recent period – 1st April 2022 to 31st March 2023

Unforeseen developments –

  1. Increase in price of primary raw material, coking coal, due to Russia-Ukraine conflict led to increase in cost of production of the domestic producers.
  2. Price of coking coal also increased due to sanctions imposed on Russia globally. Since no sanctions were imposed by China, the producers in China benefitted due to cheap cost of Russian coal and cheap procurement cost due to proximity to Russia.    
  3. Since the domestic producers are dependent upon imports of coking coal, their cost of procurement increased due to increase in freight rates globally. However, producers in Australia, China and Indonesia did not face such increase since coking coal was domestically available to them.

Facts of the present case – The present application was filed pursuant to significant, sharp and sudden increase in imports of Low Ash Metallurgical Coke into India due to unforeseen developments. The volume of imports increased in India by 10.3 lakh MT or by 40% in April – December 2022 as compared to 2021-22. While the cost of production of the domestic industry increased due to increase in cost of raw material, the landed price of imports did not increase commensurately. The landed price of imports was below the cost of sales of the domestic industry due to which the domestic industry has been forced to sell at losses. The increase in volume of imports at prices lower than the cost of sales has caused serious injury to the domestic industry.