India may look for alternatives to Russian coking coal, “supplies of which are not smooth” because of a war with Ukraine. Howver, imports from Russia to India will continue. Indian steel companies are a major importer of coking coal - mostly from Australia - while some like SAIL and JSPL have captive mines in Mozambique (Africa).
Meanwhile, the Centre has also stepped in and asked primary steel producers to supply offerings (steel)at a ₹2,000-3,000 per tonne discount to secondary steel-makers, mostly the MSMEs. This is being done to ensure that there is no major impact of risingsteel prices on the secondary producers’ finances.
“There will be some issues” (on import of coking coal from Russia) since the situation is not normal,” Ram Chandra Prasad Singh, Union Steel Minister said.
Steel makers in India are reeling under high coking coal prices and this has led to an abnormal hike in prices of long steel products and hot rolled coils (HRCs).
India and Russia signed a Memorandum of Understanding in October last year for a strategic partnership in mining and steel, with special focus on coking coal. Since signing the MoU, India received around 4.5 million tonnes of coking coal.
Russia is, currently, India’s sixth largest supplier of coking and thermal coal. “Definitely the situation there is not normal, but there is no disruption. I would rather say the supplies are not smooth,” Singh said on the sidelines of a conference jointly organised by the Ministry and CII.
He clarified that India is moving in the direction of importing coking coal from Russia, ruling out the possibility stopping investments or facing any sanctions for doing so. India’s coking coal import is projected at around 55 million tonnes for FY22.
Alternate countries
According to a senior steel ministry official, India has already begun looking at coking coal supplies from other countries like Mozambique.
Indian steel majors are already scouting for new supplies beyond Russia and some confirmed receiving coking coal supplies from US & Canada; apart from regular supplies that include Australia.
Discussions are reportedly on (at company levels) with mines in Venezuela, Mozambique and Brazil.
Specialty steel
The ministry is in discussions to come out with specific policy interventions to aid the secondary steel sector, which could bring value addition and help production of specialty steel. Specialty steel, which contributes to about 45 per cent of India’s production, is used in segments such as auto, space, defence and will also be required by the drone-makers.
Some “fine tuning” to the PLI scheme for speciality steel is also being mulled. “Registrations for PLI scheme have begun and we are in constant consultation with the industry to see if there are possibility of improvements,” Singh said.