India’s metallurgical coke imports are projected to reach a record 6 million metric tons this year, a 32% rise that defies a new five-year anti-dumping duty. The surge is driven by a domestic production shortage and tax exemptions for pig iron exporters, maintaining significant input cost pressure on the steel sector.
India's attempt to curb metallurgical coke (met coke) imports through a five-year anti-dumping duty, implemented in July 2026, is currently facing a practical hurdle. Despite the trade barrier, imports are projected to hit a record 6 million metric tons this fiscal year, marking a 32% increase compared to the previous year. This data suggests that the new tariffs have yet to bridge the gap between domestic supply and the requirements of Indian steel and pig iron producers.
The core of the issue lies in the domestic production shortfall. Local met coke output has only grown by approximately 6% year-on-year, failing to keep pace with the rising demand from heavy industry. As a result, companies have been forced to look overseas, with Indonesia emerging as a primary supplier, accounting for roughly 2.1 million tons of the imports so far this year.
Why the Duty Isn't Stopping Imports
The economics of the current market provide a strong incentive for companies to continue importing. A significant portion of the met coke demand comes from pig iron producers. Under current regulations, producers can avoid paying the import duty if the coke is converted into pig iron for export.
This exemption creates a cost advantage, making imported material often cheaper than the domestic alternative. Additionally, strong demand for Indian pig iron in the United States—where Indian product is currently priced competitively against suppliers like Ukraine—is driving manufacturers to maintain production levels. As long as this export demand holds and the duty exemption remains in place, imports are likely to continue flowing despite the anti-dumping measures.
Cost Pressure on Steelmakers
For investors, the most critical impact is on input costs. Met coke prices reached ₹35,850 per ton in August 2026, representing a 24% spike from the previous year. This inflation is compounded by rising global coking coal costs, which put direct pressure on the profit margins of steelmakers and merchant coke producers.
While the duty was designed to support domestic producers, the persistent supply shortage means steelmakers are struggling with higher manufacturing costs. If met coke prices remain elevated, these companies may find it harder to protect their profit margins, especially if steel prices do not rise in tandem.
Risks and Monitorables
Investors should be aware of several risks. First is the regulatory uncertainty; if the government reviews the current export-related duty exemptions to better protect domestic coke makers, the cost structure for pig iron exporters could shift, impacting their profitability. Second, the heavy reliance on specific foreign suppliers, particularly Indonesia, exposes the sector to trade policy shifts and supply chain disruptions.
Looking ahead, market participants should monitor domestic coke production commissioning timelines, any potential revisions to trade policy, and global coking coal price trends. These factors will determine whether the current import surge is a temporary necessity or a sign of deeper structural issues within the Indian met coke supply chain.