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Source: India's Steel Ministry supports extending the import restrictions on met coke.

A source familiar with this matter stated that the Indian steel ministry favors extending import restrictions on low-ash metallic coke due to the fact that there is enough domestic supply. This comes as a blow for steelmakers who are opposed to restrictions on overseas purchases.

India, the second largest crude steel producer in the world, placed quantitative restrictions on December 1, 2006, regarding imports of low ash met coke. The country set specific quotas, and capped purchases to 1.4 million tons from January to June.

The source declined to name herself as the deliberations weren't public.

The source stated that India produces enough met coke for local demand. However, only 3 million tons of met coke are being produced at the moment due to lack of demand.

In February, it was reported that India may extend its restrictions on the importation of low-ash metcoke to encourage domestic steel mills into sourcing this steelmaking ingredient locally.

The Indian steel ministry has not responded to an email asking for comment.

Import restrictions have caused concern among major steel producers including ArcelorMittal Nippon India, JSW Steel and ArcelorMittal Nippon India. They claim that the restrictions will hamper their plans to expand capacity because it's difficult to find preferred grades locally.

India's Ministry of Commerce will decide on the extension of curbs by next month. The steel ministry's support is vital, as it opposed the move last year, leading to a lengthy round of discussions before the curbs went into effect.

Last month, Piyush Goyal, the Commerce Minister, urged steelmakers in India to use met coke.

India also launched an anti-dumping investigation into overseas supplies low-ash metcoke from Australia and China. It has also requested a probe by an industry group.

ArcelorMittal Nippon India warned the government privately that due to import restrictions it might have to curtail or delay steelmaking and expansion plans. This was reported in March.

China, Japan and Indonesia are the major suppliers. Poland, Switzerland and Poland also contribute to the imports. (Reporting and editing by Mayank Bhadwaj, Kate Mayberry and Neha Arora)

(source: Reuters)