NEW DELHI: India is set to step up its purchases of Russian coking coal this fiscal year to cash in on lower prices and diversify its imports, trade and industry officials said.
Executives at three steelmaking companies, who didn’t wish to named, said Indian firms are keen to capitalise on lower Russian coking coal prices and faster deliveries.
Coking coal imports from Australia, New Delhi’s biggest supplier of the key raw material for steelmaking, have traditionally constituted 75 per cent to 80 per cent of India’s annual shipments.
But during the first 11 months of the previous fiscal year to March 2023, Australia’s share dropped to 54 per cent due to higher imports from the United States and Russia, government data showed.
Moscow emerged as the fourth-biggest coking coal supplier to India between April 2022 and February 2023, by exporting 3.9 million tonnes, more than double than a year earlier and may emerge as the second-biggest supplier this year, analysts said.
“Yes, that is likely considering India’s strategic focus on increasing energy sourcing from Russia,” said Snehdeep Bohra, a director at Fitch Ratings in India.
Analysts at London-based CRU, a commodity-focused research group, said recent Russian coking coal prices were 15 per cent to 30 per cent lower than Australian metallurgical coal supplies that averaged around $350 per tonne.
Russian supplies are likely to continue to be cheaper during the June quarter, the CRU analysts said.
Other than lucrative prices, relatively smooth trade flows between Moscow and New Delhi would also accelerate coking coal shipments to India given the presence of several Russian trading companies, said Rakesh Surana, partner at Deloitte India.
“These companies play an important role in facilitating trade between the two countries, as they help in coordinating transportation, logistics, and financing for coking coal shipments,” he said.
India’s coking coal demand is likely to jump 8 per cent to 10 per cent in 2023 thanks to rising steel demand from housing and infrastructure sectors, Fitch’s Bohra said.
