ArcelorMittal’s Indian joint venture warns of potential steel production cuts and delays in expansion due to government restrictions on low-ash metallurgical coke imports. The company asserts that local suppliers do not meet quality standards and has requested additional allocations from Poland and Japan. This situation raises concerns among steelmakers about operational disruptions and market stability amid ongoing challenges with domestic supply and pricing.
ArcelorMittal’s joint venture in India has issued a warning regarding significant potential reductions in steel production and delays in expansion efforts. This caution arises from import restrictions imposed by the Indian government on low-ash metallurgical coke, a critical raw material. These restrictions were enacted to support the domestic coke industry, but local providers are unable to satisfy the company’s quality standards.
In a private letter to India’s Commerce Minister, Piyush Goyal, CEO Dilip Oommen expressed concerns over the possibility of shutting down blast furnace operations by June 2025 or reducing production levels by April 2025. The letter, dated February 19 and reviewed by Reuters, highlights the adverse effects of India’s met coke import restrictions on foreign-owned steelmakers, who fear interruptions to their business.
The policy has prompted criticism from domestic competitors such as JSW Steel and Tata Steel, reflecting widespread apprehension within the industry. Notably, India’s imports of low-ash met coke have doubled over the past four years, with the government capping overseas purchases at 1.4 million metric tons for the first half of 2025. Reports suggest that the Indian government may consider extending these restrictions to compel local sourcing despite ongoing concerns about quality and availability.
ArcelorMittal-Nippon currently holds a 5% market share in India’s steel production landscape, which boasts an annual output capacity of 200 million metric tons. The company has initiated a $9 billion investment plan aimed at increasing its steel capacity to 40 million metric tons annually by 2035 and plans to commission a new blast furnace by December. However, this expansion may be hampered by current met coke restrictions.
JSW Steel has publicly criticized the strategic rationale behind India’s import limits, asserting that they do not benefit the industry. The restrictions were born from recommendations by India’s Directorate General of Trade Remedies, aimed at shielding local met coke producers from an influx of imports from countries such as China, Japan, Indonesia, Poland, and Switzerland. Steel manufacturers in India continue to grapple with challenges stemming from soaring steel imports and diminishing prices, which threaten profitability and jobs.
In summary, ArcelorMittal-Nippon’s warnings of potential output cuts and project delays underscore the challenges posed by India’s recent import restrictions on metallurgical coke. These limitations not only affect foreign companies but also raise concerns among domestic rivals regarding market stability. With looming operational changes and ongoing debates about domestic supply capabilities, the Indian steel industry faces a precarious future that demands careful consideration from policymakers.
Original Source: www.livemint.com
