China raises duty on coke, to hit Indian steel

Mon 18 Aug 2008

The Indian steel industry has been severely hit as the Chinese government on Sunday raised the duty for metrological coke to 40%. The decision represents a steep 15% hike over the earlier level of 25%, the customs department under the State Council, the Chinese cabinet, said.

Nearly one-third of Indian imports of metrological coke, an essential raw material for the steel industry, are sourced from China. Chinese coke has so far been priced competitively as compared to coke supplied by other countries like Poland and Turkey.

"The decision will hurt the Indian industry. Chinese coke is of better quality, which makes it cheaper than other sources. Now that price advantage would be lost," Vijay Singh, the Beijing based chief representative of Ispat Industries, a major buyer of this material, told TOI.

Chinese government sources said the purpose of the move was to curtail the export of this product, which causes high pollution and energy consumption at the mining level. Some other western countries have also been trying to cut production and exports of this item in view of the environmental concerns.

The prevailing price of coke is $650 a tonne, which means that the price hike will make it expensive by more than $95. But the actual effect may be a little less as there is a downward trend in the prices of steel products worldwide, which is likely to push down coke price as well, sources said.

Chinese exports of coke have risen 14 times in 15 years till 2006 when it reached 14.50 million tonnes. It hit a record 1.66 million tonnes in May this year. China accounts for 60% of the world's trade in coke.Chinese coke has the advantage of low ash content of 10.5% as compared to 12% from Poland.

Source Times of India

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