Low ash and coke restrictions increase steel prices and harm competitiveness: GTRI

With supply lagging behind demand, steelmakers are facing rising costs, margin pressure and competitive risks, prompting GTRI to call for a policy recalibration.

The report highlights that India’s dependence on imported low-ash coke is structural, as most domestic coal contains 14 to 15% ash and cannot fully support efficient blast furnace steel production.

Controls were gradually tightened

“While the government protects domestic steel producers through high safeguard and anti-dumping duties and quality control orders on finished steel imports, it simultaneously restricts access to Low Ash Metallurgical Coke (LAM Coke), a non-substitutable raw material that accounts for 35-40% of steel production costs,” the report said.

By limiting volumes and imposing high taxes on these essential inputs, policies to support steelmakers instead raise costs, erode competitiveness and stifle capacity expansion. In the steel sector, as in growth, misaligned input and output rules are working against national economic objectives, the report added.

Over the past year, the report said, India has gradually tightened controls on LAM cola imports through safeguard measures, quantitative restrictions and provisional anti-dumping duties, creating a double barrier on both volumes and prices.

A safeguard investigation in 2023 led to import ceilings, followed by nationwide QRs from January 2025, limiting imports to 1.4 million tonnes per six months, a ceiling that was then extended through December 2025. At the same time, an anti-dumping investigation in Australia, China, Colombia, Indonesia, Japan and Russia resulted in provisional duties of $60-$120 per tonne in November 2025, the report said.

Incorrect tax calculation

A major flaw in anti-dumping practice is freight benchmarking. LAM Coke is shipped almost entirely as dry bulk, with freight costs around $20-25 per tonne, but the investigation reportedly used container freight benchmarks 810 times higher, artificially inflating landed values ​​and dumping margins. This has led to tariffs becoming higher than what the actual trade economics justifies.

The impact is visible. In the first half of 2025, steelmakers could only secure around 1.5 million tonnes of coke produced against a demand of more than 3 million tonnes, leaving them dependent on uneven domestic supply and increasing the risk of production cuts.

With LAM coke accounting for roughly 38% of the cost of finished steel, a 20-25% increase in coke prices translates into a 3-5% increase in steel prices, squeezing margins and harming competitiveness at home and abroad, GTRI said.

Highlighting its suggestion to the government in this direction, GTRI said, “With the QRs nearing expiry at the end of 2025, India should restore predictable and adequate access to LAM Coke by eliminating or sharply expanding quotas, avoiding overlapping controls and recalculating import duties using realistic dry bulk freight.”

“Protecting domestic metcoke producers is valid, but piling quotas and duties on a non-substitutable input risks overcorrection and macroeconomic consequences,” it added.

Published on December 26, 2025