India could extend import curbs on steelmaking raw material, sources say

India could extend restrictions on low-ash metallurgical or met coke imports to encourage local steel mills to source the steelmaking ingredient from domestic suppliers, two sources said.

In December, India, the world's second-biggest producer of crude steel, imposed quantitative curbs with country-specific quotas on imports of low-ash met coke, restricting total overseas purchases to 1.4 million metric tons from January until the end of June.

The reluctance of Indian steel producers to buy from local producers could prompt the government to extend these restrictions beyond June, said the sources, who did not wish to be named because they were not authorised to talk to the media.

Expressing his reservations about steel mills' preference for importing met coke, India's Minister of Commerce and Industry Piyush Goyal stressed the need to source the raw material locally, the sources said.

Since met coke suppliers from China are rerouting their supplies to India via Indonesia, the Indian government has also asked local steel producers to avoid purchases from Jakarta, they said.

Despite a recent thaw in relations, ties between India and China have been tense since the biggest military confrontation in decades on their disputed Himalayan border killed 20 Indian and at least four Chinese soldiers in June 2020. In response, India has increased its scrutiny of investments from Chinese companies.

India's imports of low ash met coke have more than doubled over the past four years.

Leading steel producers, such as JSW Steel and ArcelorMittal Nippon Steel India, have expressed concerns over the quality of locally produced met coke.

They argue that any extension of import curbs on the raw material could hinder their plans to increase capacity to meet India's robust domestic demand for steel.