October 16, 2025

India's steel industry is grappling with a significant shortage of metallurgical coke (met coke), a critical raw material for steel production. In the first half of 2025, domestic production met only about half of the 3.09 million metric tons required, with the shortfall exacerbated by import restrictions. These curbs, implemented in January and extended in June, have limited imports to 1.4 million metric tons for the latter half of the year, leading to concerns among steelmakers about the adequacy and quality of available supplies.

Impact on Steel Producers

Major steel producers like JSW Steel and ArcelorMittal Nippon Steel India have expressed apprehensions regarding the import restrictions. They argue that the limited quotas hinder their capacity expansion plans and affect their ability to source preferred coke grades locally. The Society of Indian Automobile Manufacturers has also warned that these curbs could disrupt the supply of auto components, highlighting the interconnectedness of the steel and automotive industries.

Legal Challenges and Policy Reassessments

In response to the import restrictions, ArcelorMittal Nippon Steel India has filed a lawsuit against the Indian government, alleging that the retroactive application of these curbs disrupted existing orders and threatened its production capabilities. Similarly, JSW Steel has sought legal recourse, requesting the clearance of certain shipments of met coke worth $90 million. The Delhi High Court's support for the government's stance suggests a complex legal landscape for foreign-owned steelmakers operating in India.

Market Reactions and Stock Implications

The ongoing met coke shortage and the associated import restrictions have had a notable impact on the stock performance of Indian steel companies. Shares of JSW Steel (JSWSTEEL), Tata Steel (TATASTEEL), and Steel Authority of India Limited (SAIL) have experienced volatility, reflecting investor concerns about production delays and potential cost increases. ArcelorMittal Nippon Steel India's expansion plans and production schedules are also under scrutiny, potentially influencing its market valuation.

Looking Ahead

The Indian government's consideration of replacing quantitative restrictions with anti-dumping duties, as reported in September 2025, indicates a potential shift in policy approach. This move aims to balance the protection of domestic producers with the operational needs of steelmakers. The outcome of these policy deliberations will be crucial in determining the future dynamics of India's steel industry and its stock market performance.

Conclusion

India's steel industry faces a critical juncture as it navigates the challenges posed by the met coke shortage and the associated import restrictions. The resolution of these issues will require a delicate balance between domestic industry protection and the operational needs of steel producers. Investors and industry stakeholders will be closely monitoring developments in this sector, as they have significant implications for both market performance and economic growth.