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India's coking coal imports have reached a 10-year high, with 58 million tonnes (MT) arriving in FY24, owing to strong demand from steel mills. Imports increased by 7% y-o-y (from 54.3 MT in FY23) and more than 20% over a decade.
Significantly, supplies from Russia reached a multi-year high of 6.4 MT in the recently finished fiscal year, a 200% increase year on year (from 2.3 MT in FY23) and a 300% increase over a six-year period (from 1.6 MT in FY19), according to statistics from various ministries and trade sources.
India is still one of the world's top importers of coking coal, a vital raw material for steel production. Over the previous 10 years, segment imports have fluctuated between 47 MT and 54 MT.
For FY24, Australia continued to be the largest supplier of coking coal, accounting for 59% or 34.2 MT of overall shipments, marking a subsequent decline. The country ceded market space to Russia - now having a 12 % market share - and the USA, with 14% at 8.4 MT of supplies. Price volatility of Australian coal, higher discounts offered by Russia, and alternative options from the USA quickly led to changes in market share. By FY23, Australian supplies occupied 70% market share, USA was at 12.5%, while Russia saw its share move up to 5%.
However, throughout the year, Russia continued to offer discounts of 20-25%, while Indian mills also started re-calibrating their furnaces to ensure a better mix of high-ash-content coal coming in from Russia. Russia displaced countries like Mozambique and Canada to become the third largest supplier of raw materials.
“Steel demand and production have been robust in India, with the country defying the global slowdown. Steel demand continued to be on the higher side, with a record hike in sponge iron production,” the government source explained.
India’s sponge iron production rose 20% y-o-y to 52 MT in FY24, up 43 MT in FY23. This allowed production through the induction furnace route. A BigMint report said sponge iron production rose as imported coal prices fell around 48% (y-o-y) to $109/t CNF Gangavaram in FY24, as against $209/t in FY23. As a result, imports of thermal coal used in the sponge iron sector saw a 62% spurt last fiscal.
India’s crude steel production increased around 14% to 143 MT last fiscal, up from 127 MT a year ago. The growth came following a sharp increase in production through the induction furnace route. Steel making through induction furnaces grew 25% year over year to 50 MT, up from 40 MT in FY’23. The electric arc furnaces (EAFs) showed a 12% growth to 31 MT.
Also Read : Domestic finished steel consumption climbs 13% to 136 MT in FY24 India's iron ore exports climbed by 20% y/y in January-June
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