India is set to maintain its position as the leading importer of coking coal, crucial for steel production, despite concerns over rising raw material costs, according to the Indian Steel Association.
The Indian Steel Association (ISA) has recently acknowledged that India will continue to be the top importer of coking coal for the foreseeable future. This trend is largely driven by an increase in domestic steel demand and a shift in China's reliance on its own resources.
Coking coal is an essential raw material for manufacturing steel via the blast furnace route, and India's steel industry is actively seeking sustainable methods to utilize coking coal. This quest for sustainable usage aligns with the country's broader goals but is recognized as a long-term endeavor by ISA President Dilip Oommen.
With India's steel production on the rise and the country being the world's largest DRI producer, the demand for coking coal is expected to grow. This growth has led to India planning new capacities in the BF-BOF (blast furnace-basic oxygen furnace) route. Currently, the BF-BOF route accounts for 46% of India's steel production, with electric arc furnaces (EAF) and induction furnaces (IF) using thermal coal at 22% and 32%, respectively.
The country's largest imports of met coal, which includes pulverised coal injection (PCI), range between 70-75 million tonnes annually, coming from countries like Australia, the US, Canada, Mozambique, and Russia. The latter has become increasingly significant, with Russian imports seeing a 2.3-fold increase this year.
Despite these developments, the rising prices of coking coal are a concern. SteelMint India reports that prices have increased by about USD 100 per tonne in the last six months, currently trading at USD 350 per tonne.
ISA Secretary General Alok Sahay emphasized the importance of a partnership between coking coal miners and the steel industry, advocating for rationalized and transparent price discovery.
As India solidifies its position as a prominent coking coal importer to support its expanding steel industry, it faces the challenge of balancing growth with the rising costs of essential raw materials. Efforts to enhance efficiency, explore sustainable practices, and open up domestic resources are crucial to maintaining the industry's momentum while managing the impact of global pricing trends.