The introduction of this quota will primarily impact Indonesian and Chinese coke producers, who have gained market share in India through aggressive price competition. As a result, coke prices in India are expected to rise. The quota will also reshape the seaborne coke trade, with Chinese and Indonesian coke likely to shift market share, particularly towards Southeast Asia.
Why India imposed restrictions on coke imports?
India is on track to import close to 5 Mt metallurgical coke in 2024, compared to 2.9 Mt/y during 2019−21. Metallurgical coke imports increased from China and Indonesia while Poland and Japan origin coke has lost market share during this period. Coke makers from China and Indonesia won market share by offering significantly discounted coke in the seaborne market.
Furthermore, the delivered price of Chinese and Indonesian coke was consistently below the cost of domestically produced coke. This prompted Indian buyers to reduce domestic purchases and replace this volume with imports. Indian imports from China and Indonesia increased five-fold in 2024 compared to the 2019–21 average.
Indian domestic merchant coke accounts for ~15% of domestic capacity (CRU coke capacity database). Merchant producers have been forced to operate at reduced utilisation rates (many below 50%) for more than two years. Extreme price volatility in seaborne met. coal prices from 2022 to mid-2024, and market share gains by discounted imported coke, have led to India’s merchant coke sector suffering severe financial losses.
India’s Metallurgical Coke Manufacturers Association has repeatedly called on the government to impose restrictions on coke imports. The import quota system was first proposed in April 2024 but was delayed due to opposition from steel producers. The quota was finally implemented as the status quo was unsustainable for the domestic merchant coke sector.
The restriction on coke imports will lead to a coking coal demand increase in India and spot purchases in the seaborne market. This will be an upside risk to coking coal prices. CRU will keep close watch on how these restrictions will be implemented and analyse the effect on coking coal prices in our upcoming edition of the Metallurgical Coal Market Outlook.
