ArcelorMittal Nippon Sues India Over Raw Material Import Restrictions
ArcelorMittal Nippon has filed a lawsuit against the Indian government over the retroactive imposition of import restrictions on low-ash metallurgical coke. The company warns that such restrictions threaten its production capabilities and could lead to financial losses. Competitor JSW Steel has also challenged the government regarding similar issues, emphasizing the importance of consistent policy enforcement.
ArcelorMittal’s joint venture in India has initiated legal action against the Indian government following the rejection of its imports of low-ash metallurgical coke. The company asserts that India is imposing import restrictions retroactively, negatively impacting its operations.
In January, India instituted quotas on met coke imports to prioritize domestic suppliers, raising concerns for major industrial players like ArcelorMittal Nippon Steel India regarding the quality of local supply. The company has cautioned that such restrictions may force it to limit its steel production and postpone expansion plans.
On March 5, ArcelorMittal Nippon filed a lawsuit in the Delhi High Court, challenging the rejection of import orders for 168,300 tonnes of met coke from Indonesia and Poland. India contended the company had sufficient met coke but ArcelorMittal argues this contravenes the principles of free trade, as existing orders should not be subjected to new restrictions.
The court filing claimed that the retroactive application of these restrictions undermines confidence among traders and investors. The joint venture, comprising ArcelorMittal and Nippon Steel, has requested a prompt response from the government, which has thus far remained silent.
JSW Steel, a competitor, has also litigated against the Indian government regarding delays in approving met coke imports worth $90 million, emphasizing the need for consistent policy implementation for effective business planning.
India’s Steel Secretary, Sandeep Poundrik, has maintained that adequate domestic supplies exist, claiming that businesses prefer imports due to cost advantages. ArcelorMittal, however, argues that the abrupt policy shift jeopardizes its production capabilities and could lead to substantial financial losses, estimating costs of up to $25 million per shipment and significant detention fees.
The company issued a confidential alert to the government about impending operational shutdowns, noting it may have to halt its blast furnace activities by June. With a 5% market share in India’s steel production, which totals 200 million metric tons annually, the new import restrictions could have wide-reaching impacts on the industry.
India’s imports of low-ash met coke have surged over the past four years, but new limitations restrict total purchases to 1.4 million metric tons in the first half of the year, complicating business operations for companies reliant on these materials.
In conclusion, ArcelorMittal’s legal challenge against the Indian government’s import restrictions on met coke highlights significant concerns regarding trade policies that may adversely affect the steel industry. The retroactive enforcement of import quotas poses risks to production capabilities and financial stability for key players in the sector. The legal developments surrounding this case will be critical in determining the future of raw material imports in India’s evolving market.
Original Source: money.usnews.com
