Synopsis
India's steel industry is diversifying its coking coal sourcing as it reduces its reliance on Australian imports. While Australia has historically been the largest supplier of coking coal to Indian mills, sourcing from the country has decreased from 70% to 50%. Indian steel mills are now exploring alternative sources from countries like the USA, Russia, Canada, Indonesia, New Zealand, and Singapore. Additionally, discussions are ongoing with Mongolia for potential coking coal supplies, albeit with concerns about ash content and logistics. This diversification aims to secure a stable supply of this crucial raw material, reports Business Line
Article
In a strategic move, India's steel mills are actively seeking alternative sources for coking coal to reduce their dependence on Australian imports. The country's coking coal sourcing from Australia has decreased significantly, from 70% to 50% in the first few months of the fiscal year.
Met coke prices (FOB-Australia) were observed at $314 per tonne, highlighting the need for diversification in sourcing this crucial raw material.
According to Nagendra Nath Sinha, Union Steel Secretary, Indian mills have been proactive in exploring coking coal options from various countries. These include the USA, Russia, Canada, Indonesia, New Zealand, and Singapore. This diversification has provided multiple sourcing options for Indian steel mills, ensuring a more stable supply chain.
While exploring new sources, India continues to engage with Mongolia as a potential supplier of coking coal. However, there are concerns about the ash content in Mongolian coal, which needs to be addressed. Discussions have also focused on the logistical challenges of transporting coal from land-locked Mongolia.
Despite being the world's second-largest producer of crude steel, India remains dependent on coking coal imports. In FY23, India imported over 56 million tonnes of coking coal, with approximately 52% of it coming from Australia. This trend has continued into the current fiscal year, with Australia supplying around 50% of the 9.9 million tonnes of coking coal imported in the first couple of months.
Russia has emerged as the third-largest supplier to India, providing 1.65 million tonnes in April–June 2023, while the USA is the second-largest supplier at 1.96 million tonnes. However, high ash content has limited demand for coking coal from Mozambique, another key supplier.
Discussions with Mongolia have been ongoing, with the country working on building evacuation facilities and processing facilities at its mines. These developments could pave the way for India to tap into Mongolia's coking coal market in the future.
Conclusion
India's steel industry is actively diversifying its coking coal sourcing to reduce dependence on Australia and secure a more stable and versatile supply chain.
Source: Steelguru
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