India’s Russian coking coal buying for April – June period (Q1) is at a five-year-high at 2.02 million tonnes (mt); while share of shipments from Australia – the key hard coking coal supplier – in total imports has fallen to a five-year-low of 56 per cent at 8.64 mt.
Australia, though, continues to be the highest supplier despite its steadily declining share in Indian imports. And, the USA is the second highest supplier of coking coal at 2.08 mt, down 2.5 per cent y-o-y .
Incidentally, share of Russian coking coal imports have steadily moved up from 9 per cent to 13 per cent of total imports between Q1FY21 (1 mt out of 11 mt) and Q1FY25, indicating a CAGR of 15 per cent.
In fact, on a y-o-y basis, shipments from Russia in the April – June period of this fiscal was up 45 per cent from 1.40 mt , as per data collated by market research firm, BigMint.
The country has displaced other popular sources such as Mozambique and Canada.
In Q1FY25, India imported 15.49 mt, up 4 per cent-odd, year-on-year. Coking coal imports for the same period last fiscal was 14.98 per cent.
India, the second largest crude steel producer globally, is the largest importer of coking coal.
Changing market
“Steel mills have steadily explored new countries for securing coking coal sourcing. And from 62 per cent in Q1FY21, and 75 per cent-odd (share to total imports), Australian supplies are significantly down this time. Price volatility and recalibrating furnaces are seen as key reasons for the change,” a Steel Ministry official told businessline.
Beyond the regular supply nations, there are plans to explore shipments from Mongolia on a trial basis. At least two shipments of 150,000 tonnes (each shipment of 75,000 tonnes) is being expected during the fiscal.
Incidentally, India is also exploring a “one nation one buying of coking coal” where it has been proposed that the Centre and steel companies come together to set up a consortium for buying the key steel-making feedstock. Some of the steel mills are yet to come on-board with the idea.
Price volatility
Coking coal prices on July 26 was around $221 / tonne, the lowest in nearly a year (post Covid highs).
According to Keith Tan, Associate Regional Driector, Asia Metals Pricing, S&P Global Commodity Insights, coking coal spot prices have fallen to the lowest since August 10, 2022, brought about by weak demand from steel and coke producers in India, Southeast Asia and China.
“Other than steel demand undergoing a seasonal lull in India (because of monsoons) and China, a surplus of steel in international markets has also given downward pressure to prices.,” he told businessline.
The benchmark hot-rolled-coil (HRC) price (ex-Mumbai) was around ₹50,200 per tonnes during the ongoing week, improving slightly over the ₹49,800 per tonne during the earlier part of the week. However, HRC prices are 5 per cent-odd lower than the same period last month, when it stood at ₹52,800 per tonnes.