India’s coking coal imports at 5-year high; Russia now among top three suppliers

NEW DELHI 

India’s coking coal imports are at a five-year high for the April-November period (11 months) of this fiscal at 38.14 million tonnes (mt). Imports were slightly higher on a Y-o-Y basis with nearly 38.12 mt of shipments coming in for the comparative period last year. 

Buoyant steel demand in domestic markets continues to be a key reason for increasing demand in coking coal. 

While Australia continues to be dominant supplier, accounting for 60 per cent of the shipments – and a decline in share from a high 75 per cent some five years ago – India’s steel mills are increasingly warming up to alternatives for supply of the key feedstock material from Russia and the US. Supplies to these countries have more than doubled in the five-year period. 

Also read

India’s thermal coal imports from the US at over two-year high in November

• Also Read: Use of imported coal by power sector to decline to 2% in FY25: Pralhad Joshi

Russia is the third largest supplier replacing countries such as Canada and Mozambique. 

India, despite being the second largest producer of crude steel globally, after China, remains short on coking coal supplies, especially at a domestic level. Mills rely primarily on imports, making the country the largest importer of coking coal. 

Changing Dynamics

Data from various ministries and trade sources, including from market research firm BigMint (formerly SteelMint), show that Australian hard coking coal supplies slid down to 22.78 mt in 11 months of FY24, down by 17 per cent over a five-year period. This incidentally is the lowest shipment from Australia in over five years. For the same period of FY20, it was 27.44 mt. 

On a YoY basis, shipments of Australian coking coal were down 10 per cent from 25.16 mt in 11 months of FY23. 

Against this, Indian mills continued to explore alternatives, primarily to counter price volatility arising out of dependence on a single country, namely Australia.

Russian supplies more than doubled in this half a decade period, from 1.75 mt in 11 months of FY20 to 3.9 mt in 11 months of FY24 (up 123 per cent). Interestingly data show, Russian coking coal supplies practically trebled on a YoY basis from just 1.4 mt in 11 months of FY23. 

Over a five-year-period, coking coal supplies more than doubled from the US too. From 2 mt in 11 months of FY20, it rose to 5.8 mt in the 11 months of this fiscal, a near 200 per cent jump. On a YoY basis, supplies increased 10 per cent. 

• Also Read: Govt to launch 9th round of commercial coal auctions on Dec 20

“So, Russian coking coal supplies have shot up specially with lenient buying norms, including discounts being provided. Indian mills are also managing the blend with Russian coal quite well. And right now, India is exploring alternatives beyond Australia. The numbers are already visible with the share of Austrian coal to total coking coal imports going down steadily,” a Steel Ministry official told businessline.

Some other countries from where sourcing has begun including Poland and New Zealand, although numbers remain quite small. India is also exploring the possibility of tapping Mongolia, if infrastructure and supply lines are put in place.  

Rising steel demand 

Increased coking coal demand has so far been supported by a rise in steel production in the domestic market. Production of finished steel increased by 13 per cent on YoY basis to 88.9 mt for the period under review (as against 78.5 mt). Consumption stood at 87 mt, up 15 per cent YoY, as per data available from the Steel Ministry. 

Crude steel production was at 94 mt for 11 months of FY24, up 15 per cent YoY, as compared to 83 mt in the year ago period. Pig iron and hot metal production stood at 4.7 mt and 56.78 mt, up by 19 per cent and 8 per cent, respectively. 

COMMENT NOW