India green coke import quota spread thinner

The Indian government has spread anode-grade green petroleum coke (GPC) import quotas among an additional five calciners for this fiscal year, reducing the amount available to larger calciners like Goa Carbon and Rain CII Carbon.

Guwahati Carbon, Carbon Resources Bihar, Carbon Resources Assam, Digiboi Carbon and Raipur Minerals applied for a portion of the 1.4mn t/yr total allowed for the industry according to a 2018 Indian Supreme Court order. Because these calciners were in operation prior to the original ruling, the Ministry of Commerce and Industry's Directorate General of Foreign Trade (DGFT) agreed to grant them allocations. These new applicants received roughly 142,893t, or a little more than 10pc of the industry total for the year.

The decision results in a quota cut for all but one of the nine firms that held quotas during the last fiscal year, which ran from 1 April 2020 to 31 March 2021. Goa Carbon suffered the largest reduction from its prior-year allocation, down by 77,408t to 213,089t. Petro Carbon and Chemicals lost the most on a percentage basis, with its allocation down by 33pc from FY2020-21 to just 59,180t. India Carbon, Neo Carbons and Amritesh Industries all had their allocations cut by about a quarter from a year earlier.

The large cuts for these companies are a result of the agency deciding to subtract any unused quotas from firms' fiscal year 2021-22 allocations, in an attempt to discourage companies from sitting on allocations that could be used by other importers.

The DGFT in mid-February reallocated about 221,100t of unused quotas to Rain and Sanvira Industries. But the additional coke needed to be received by 31 March — a difficult deadline in the tight green coke market. Sanvira managed to secure four vessels with about 82,000t of coke, but the DGFT only agreed to apply less than half of this to its FY2020-21 quota, as the bills of lading on the other vessels were dated after 1 April.

Other companies requested that the agency extend the deadline to use their quotas because of the difficulty in importing green coke. India Carbon and Neo Carbons said they had entered into an agreement with Cemerlang Coke Industrial of Malaysia for a 21,000t cargo in late-April for early June delivery. Petro Carbon said it was trying to secure import coke and had managed to finalize contracts for May loading. Amritesh simply said it was unable to enter into any firm import contracts.

Goa said it had been waiting for specific approval to extend its FY2020-21 import license before entering into contracts. Goa's output had been hampered last fiscal year by frequent maintenance shutdowns and a lack of "viable export and domestic orders" as a result of the Covid-19 pandemic.

The agency continued to deny a portion of the quota to Rain's new vertical shaft calciner in the Visakhapatnam Special Economic Zone (SEZ), which was under construction at the time of the original Supreme Court ruling. The court has ruled that only calciners operating prior to a 2018 Environment Pollution Control Authority (EPCA) report on the country's capacity can be eligible for quotas. Rain has challenged this ruling, as its SEZ calciner was permitted and construction already under way at the time. But the court has so far not been receptive to its case.

The company continues to request governmental approval for coke imports for the new facility, but it is also looking at other feedstock options.

Rain's FY2021-22 allocation, at 451,892t, is only about 65pc of the quantity needed to run its original plant in Visakhapatnam.

The DGFT also issued quota allocations for calcined coke to three aluminium smelter — Vedanta, Bharat Aluminium and Hindalco Industries. These allocations were also well below the amounts that the companies requested, but they were higher than the companies had received in FY2020-21, as state-controlled Nalco did not apply for a quota.

Vedanta received 294,400t, about 25pc less than it applied; Bharat received 49,224t, about 67pc less than it applied; and Hindalco received 156,375t, about 22pc less than it applied for.

By Lauren Masterson