The government has extended the import restriction on soda ash and low-ash metallurgical coke for six months. This decision may impact several companies, with some benefiting and others facing negative consequences. Read on for complete details.
The central government has extended the import restriction on soda ash and low-ash metallurgical coke for six months. This restriction will now remain in effect until December 31, 2025. The Directorate General of Foreign Trade (DGFT) issued a notification in this regard on June 30. Following this decision, there was movement in the stocks of companies listed on the stock market.
Quota and Price Determined for Imports
From July 1 to December 31, 2025, the government will permit imports on a quota basis from various countries. A total limit of 1.4 million metric tons has been set. Additionally, a minimum import price of ₹20,108 per ton has been set for disodium carbonate, i.e., soda ash. This rate was previously applicable only until June 30, which has now been extended to the end of the year.
Impact on Soda Ash Companies
Soda ash is primarily used in the glass, detergent, and chemical industries. In India, companies like Tata Chemicals, GHCL (Gujarat Heavy Chemicals Limited), DCW Limited, and Gujarat Alkalies and Chemicals produce soda ash. The government's decision to limit imports will directly benefit these domestic producers.
After the market opened on July 1, a rise of about one and a quarter percent was observed in all stocks except Tata Chemical. Investors believed that domestic supply would increase and that sales of these companies would likely rise.
Restrictions Also Placed on Metallurgical Coke
Under another notification, the government has also extended the deadline for restrictions on the import of low-ash metallurgical coke. This restriction, which was previously in effect until June 30, 2025, has now been extended until December 31, 2025. This decision will directly impact companies associated with the steel industry.
Countries from Which Limited Imports Will Be Allowed
India has determined quotas for imports from Australia, China, Indonesia, Columbia, Japan, Poland, Qatar, Russia, Singapore, Switzerland, and the United Kingdom. A total of 1,427,166 tons of low-ash metallurgical coke will be allowed to be imported from these countries between July and December 2025.
Impact on Steel Companies
Metallurgical coke is used in steel production. Consequently, the import restrictions may affect companies such as JSW Steel, Vedanta, and ArceloMittal Nippon India. Their expansion plans and production costs may be affected because they will now have to depend on domestic suppliers instead of foreign ones.
Increased Domestic Purchasing Possible
The government's aim is for steel-making companies to purchase metallurgical coke from domestic sources. This step has been taken to promote domestic production within the country. However, this might slightly increase the companies’ costs, as the prices of domestic coke may differ from those in the international market.
Anti-Dumping Investigation Launched
The Indian government has also initiated an anti-dumping investigation on the import of low-ash metallurgical coke from China, Australia, Columbia, Japan, Indonesia, and Russia. The government has taken this step after receiving requests from industry bodies. The investigation aims to ensure that imported coke does not harm the domestic market.
Impact Seen in the Stock Market
Following this government decision, gains were seen in stocks like Tata Chemicals, GHCL, and DCW on July 1. Meanwhile, shares of companies like JSW Steel and Vedanta showed early trading pressure. Investors will be keeping an eye on the government's supply-related guidelines in the coming weeks.
