India has stepped up its purchase of coking coal from Russia with the latter emerging as the third largest supplier of the key steel-making feedstock so far in April-May of 2023.
Steel mills imported nearly 1.1 million tonnes (mt) of coking coal from Moscow, up 700 per cent year-on-year (y-o-y), for the period under review, data from Steel Ministry, and other trade sources show.
Coking coal shipments from Russia in the same period last year was just 0.13 mt, which included 0.022 mt of supplies in May and 0.11 mt in April of 2022.
As per data collated by research firm SteelMint, in May 2023 shipments of coking coal from Russia were at 0.43 mt, down 35 per cent m-o-m, over April at 0.67 mt; but up by over 1,500 per cent since May 2022. The April shipments were up over 500 per cent y-o-y.
Favourable prices and offers from Russia (around 15-30 per cent lower than Australian coking coal offers), which averaged out at $350 per tonne last year, are seen as a reason for imports shooting up.
Russia traditionally has been among the top 10 coking coal suppliers, but moved in the top five last fiscal. Since the beginning of this fiscal, in April, it replaced two key markets Canada and Mozambique; as well as Indonesia to be among the top three. The trend continued in May.
Coking coal imports from Australia, the country’s biggest supplier of the key raw material for steel-making, have traditionally constituted 75-80 per cent of annual shipments. But government data show that Australia’s share dropped 54 per cent due to higher imports from the United States and Russia.
India, the world’s second largest crude steel producer, imports close to 90 per cent of its coking coal requirements. In FY23, coking coal imports were to the tune of 54 mt.
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Import trends so far
Steel Ministry data, accessed by businessline, show that for the April and May period, Australia and the US were the top two suppliers with 5.82 mt and 1.45 mt of coking coal shipments coming in, respectively.
However, a y-o-y comparison showed that shipments from Australia dropped 16 per cent (from 6.9 mt in last year’s April-May) while the USA saw a 13 per cent-odd increase in supplies (from 1.28 mt).
On a month-on-month (MoM) basis, Australian coking coal witnessed a 20 per cent-odd increase in May, driven primarily by restocking needs across India’s steel mills; and a slight correction in prices. Current Australian coking coal prices (premium hard quarlity) are at $236 per tonne, up $ sevenper tonne on a daily trade basis.
While supplies from Canada witnessed a 150 per cent increase in May (over April), purchases from Mozambique and Indonesia were down 10 per cent and 50 per cent, MoM, respectively, SteelMint data showed.
Overall coking coal shipments for April-May of this fiscal remained almost flat at 10 mt-odd.