Key Highlights:
- 29.6 Million Tonnes Imported: This figure is up 3% from 28.8 mt in the same period last year, and significantly higher than 21.1 mt in H1FY21.
- Steel Production Growth: India’s crude steel production reached 73 mt in the first six months of FY25, a 4% increase year-on-year.
Russian Supplies Surge as Mills Seek Cheaper Alternatives
Russian coking coal imports by Indian steel mills rose sharply:
- 200% increase in Russian imports: Shipments from Russia hit 4 mt, compared to 2.9 mt in H1FY24.
- Discount Advantage: Indian mills, including SAIL and JSW, took advantage of these cheaper Russian supplies, helping reduce costs and diversify supply sources.
- Third-Largest Supplier: Russia now ranks as India’s third-largest supplier, after Australia and the U.S.
Decline in Australian Coking Coal Share
Traditionally India’s top supplier, Australia’s share of Indian coking coal imports has seen a notable decline:
- 54% Share: Australian coal imports accounted for 16 mt out of 29.6 mt, marking a six-year low.
- Shift from 80% Share: In H1FY22, Australian supplies held 80% of India’s imports, highlighting India’s diversification strategy to rely less on a single source.
Imports from Other Countries
While Russia is leading in new supply, India’s coking coal imports have also shown:
- Slight Uptick from Mozambique and Indonesia: Traditional sources such as Mozambique and Indonesia saw steady imports.
- Decline from Canada: Imports from Canada dropped, partly due to diplomatic issues and better pricing options from other countries.
Rising Steel Production Drives Demand
The Steel Ministry’s data reveals that India’s steel production has risen to meet the demand:
- India, the world’s second-largest steel producer, has increased its coking coal needs, causing a boost in imports.
- Steel mills have been able to adapt their blast furnaces to accommodate the varied quality of Russian coking coal, benefiting from cost savings and flexibility.
What is Coking Coal?
Coking coal, also known as metallurgical coal, is a naturally occurring sedimentary rock found within the earth’s crust. Unlike thermal coal, which is used in power generation, coking coal has a higher carbon content and less ash and moisture, making it ideal for steel production. Some key points about coking coal:
- Essential for Steelmaking: It is an essential ingredient in producing steel, one of the most widely used building materials in the world.
- High-Temperature Carbonization: Through a process called carbonization, coking coal is transformed into metallurgical coke (or simply, coke), a critical material in steelmaking.
- Role in Blast Furnaces: Coke acts as the reducing agent for iron ore in blast furnaces, supporting the charge while facilitating the production of pig iron, a primary steel component.
On average, it takes 770 kg of coal to produce one ton of steel. Approximately 70% of global steel is produced in basic oxygen blast furnaces, where coke plays a key role.
Leading Coking Coal Producers
- China: 676 million tons (62% of global production)
- Australia: 169 million tons (15%)
- Russia: 96 million tons (9%)
- USA: 55 million tons (5%)
- Canada: 34 million tons (3%)
Summary
India’s rising coking coal imports, driven by both higher steel production and discounted Russian supplies, reflect the country’s strategic shift towards diversified and cost-efficient sourcing. This trend allows India to remain resilient amidst global trade shifts while maintaining its position as a leading steel producer.