Russia is amongst the top two suppliers of coking coal to India for the January–July period. Purchases were 26 per cent higher during the period to 4 million tonne (mt) due to cheaper offerings, coming at 30 per cent lower rates, and due to supply issues from Australia, the key seller.
Metallurgical coal exports from Russia during the same period last year was around 3.2 mt and it also included pulverised coal for injection (PCI). Coking coal is one of the key raw materials for steel-making and accounts for about 40 per cent of the steel-making cost.
Trade sources say over the last two to three years, Russia was among the top four suppliers of coking coal competing with the US and Canada.
For the January–July period, exports from Australia stood at 22.6 mt, down 28.4 per cent, while exports from US were at 4 mt., up 93 per cent. Exports from the US were on par with coal purchases from Russia, as some Indian mills tapped alternative countries to secure coking coal.
Canada, Mozambique and Indonesia were among the three other major suppliers with 1.5 mt, 1.4 mt and 1 mt respectively. Mozambican coal imports picked up from June onwards with an Indian steel maker mooting its use in sponge iron mills.
“Russian coal, majorly PCI, is being imported by India to reduce dependency on Australian high-cost coking coal. The met coal imports from Australia are on a decline because of volatile pricing there,” a steel mill official told businessline.
Data for the period show India’s met coal imports from Australia declined by over 28 per cent (from 31.6 mt in Jan– Jul 2021 to 22.6 mt ) due to the volatile pricing.
Import trend
While the presentation made to the Ministry showed a 7.4 per cent decline in coking coal imports for the January– July period at 40.1 mt versus 43.3 mt in the year-ago-period, trade sources say imports increased by 4–5 per cent YoY between April and August to 23.2 mt (22.2 mt).
Between January and September, coal imports were close to 42 mt, almost flat y-o-y, trade sources said.
As per Coalmint data, the coal arm of Steelmint, the January– September 2022 import was 41. 8 mt versus 42.2 mt in the year-ago-period. Arrivals from Australia fell 16 per cent to 29 mt (January– September), while stocks brought from the USsurged by 118 per cent YoY to 5.53 mt.
“Weak domestic steel demand and likelihood of supply disruptions in Australia due to heavy rains may limit any surge in coking coal imports,” the report said.