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Dumping duty on Chinese coke takes toll of pig iron makers

G. Rambabu

NEW DELHI, Nov. 22

THE rising input costs has taken its toll on the pig iron production of the main steel producers - Steel Authority of India Ltd (SAIL), Indian Iron and Steel Company (IISCO) and Rashtriya Ispat Nigam Ltd (RINL).

According to official sources, as a result of the high anti-dumping levies on metallurgical coke from China, the main producers have cut their pig iron production by 27.34 per cent during the first-half of the current fiscal to 4.49 lakh tonnes from 6.18 lakh tonnes in the corresponding period last year.

Following this sharp decline, the main producers have asked the Steel Ministry to request the Commerce and Finance Ministries to take appropriate steps to contain the input costs.

To start with, the main producers have sought a withdrawal of the anti-dumping duties on metallurgical coke from China.

``With the unduly high anti-dumping duty on Chinese coke, which is a crucial raw material for manufacturing pig iron, there has been a phenomenal increase in input costs,'' they noted.

The Steel Ministry has, therefore, requested the Commerce Ministry to reduce, if not revoke, the anti-dumping duties. This is expected to provide relief to the steel and pig iron industry.

The companies have pointed out that the quality of metallurgical coke available locally is of a poor quality, with a very high level of ash content, which makes it unsuitable for making pig iron. While coke from the rest of the world is very expensive an d the quantity of ash is not always desirable, Chinese coke is the best available.

Pig iron is an important raw material used in the casting and foundry units engaged in the manufacture of various types of castings for the engineering industry. It is also an intermediate product in the production of steel.

In fact, the officials noted that the steel companies which produce pig iron as an intermediate product have been considering ways to decrease their pig iron production by increasing their steel melting capacity. Pig iron in many of these units is drawn out when steel melting shop is not capable to convert the total metal into steel.

The anti-dumping duty on Chinese coke was invoked following a petition by BLA industries, Gujarat on behalf of the domestic coke industry, supported by Industries and Commerce Association, Dhanbad.

The Steel Ministry has also requested the Finance Ministry to reduce the customs duty on metallurgical coke from the present 15 per cent to five per cent. However, that is a decision which will have to wait till the Budget.