India’s steel mills have replaced “costly” Australian coking coal with alternatives, mostly from Indonesia, Russia and the United States. For the April-November period, all three countries have gained the most, with growth of 187 per cent, 138 per cent and 163 per cent, respectively.
Imports from Australia declined by more than 18 per cent to 23.6 million tonnes (mt) for the eight-month period from 28.9 million tonnes in the year-ago period, data from the ministry and trade sources showed.
On the other hand, Indonesia supplied 1.84 million tonnes (0.64 million tonnes) in the April–November period; Russian supplies increased to 1.67 million tonnes (0.7 million tonnes) and those of the United States to 5.50 million tonnes (2.09 million tonnes). Canada saw a 26 percent increase in supplies while Mozambique saw a 36 percent increase in orders.
However, Australia remains the largest supplier of coking coal, followed by the United States, Canada, Indonesia, Mozambique and Russia.
Both Russia and Indonesia grew in terms of supplies on a year-on-year basis. Russia is already a major met coke supplier – which includes coking coal, PCI and anthracite.
India, the second largest producer of crude steel in the world, is also one of the largest importers of coking coal, meeting almost 90 per cent of its requirements through imports. Coking coal is a major raw material in steel making.
price rise
During the calendar year 2022, the price of the benchmark coking coal variant saw the second largest increase of about 50 per cent among steel-related raw materials. Last year the average price was $390 per tonne as against $260 per tonne.
“Prices reached a high of $620/t in March, fell to $510/t and $540/t in April and May respectively, but remained above the average for almost the entire year of 2021,” according to colmintcoal arm of steelmint,
Coking coal prices saw a rise in Australia due to supply disruption due to heavy rains. “However, as war broke out and the West imposed sanctions on Russia, prices skyrocketed. Like thermal coal, Europe began sourcing coking coal from Australia,” the report said.
options explored
According to a steel industry observer, the gap in orders in key markets is seen in line with months when prices were rising.
For example, with coking coal prices heading north in the February-April period of 2022, supplies from Australia are set to fall by 20 per cent in April to 3.2 million tonnes annually (from about 4 million tonnes); and fell again to 3mt (3.5mt) in May.
The United States, on the other hand, saw supplies increase by 440 percent and 125 percent during April and May. Meanwhile, Indonesia saw a substantial increase in orders in the months of April, May and June, the data show.