India: Import Duty on Met Coke raised to 5% in Budget 2015-16

Import duty on Met coke has been raised to 5% w.e.f 01 Apr’15, which was at 2.5%.

Import duty on Met coke has been raised to 5% w.e.f 01 Apr’15 in Budget 2015-16, which was announced by Finance Minister Arun Jaitley today; the duty was at 2.5%. Thus, imports shall be costlier by USD 10/MT.

When asked about the impact to R K Goyal, MD at Kalyani Steel, he expressed, “Our cost of imports will increase by USD 10/MT as we are reliant on imports. We neither have a coke oven plant, nor do we procure the material from domestic market because imported Coke is of superior quality”.

The Steel industry was hopeful of some rise in import duty because of increasing imports from China. Met coke exports from China attracts no duty since Jan’13. As per our statistics, India has imported 3.1 MnT Met coke from Apr’14-Feb’15. Out of this, 58% has been imported from China alone.

Now, costlier imports may boost domestic Coke manufacturing and local suppliers may well lift their prices by INR 575-600/MT according to our calculation.

The import duty on Coking coal remains at 2.5%, which is a right step for the integrated Steel producers with Coke making/Cokeries. Though, Coke imports will be costlier, demand and supply dynamics for both domestic and imported Coke, shall play an important role too.

Had there been any change in basic customs duty on Coking coal which is at 2.5%, then it would had nullified the imported vs domestic costing difference on Met coke.