India is already looking for alternatives to Russian coking coal, “whose supplies are not going smoothly” due to a war with Ukraine. However, imports from Russia to India will continue. Indian steel companies are a major importer of coking coal – mainly from Australia – while some, such as SAIL and JSPL, have mines in Mozambique (Africa).
Meanwhile, the center has also intervened and asked primary steelmakers to supply supply (steel) at a discount of ₹2,000-3,000 per tonne to secondary steelmakers, mainly the MSMEs. This is done to ensure that rising steel prices do not have a major impact on the finances of secondary producers.
“There will be some problems” (with the import of coking coal from Russia) as the situation is not normal,” said Union Steel Minister Ram Chandra Prasad Singh.
Steel producers in India are struggling with high coking coal prices and this has led to an abnormal price increase of long steel products and hot rolled coils (HRCs).
India and Russia signed a Memorandum of Understanding in October last year for a strategic partnership in mining and steel, with a special focus on coking coal. Since the signing of the MoU, India has received about 4.5 million tons of coking coal.
Russia is currently the sixth largest supplier of coke and thermal coal in India. “The situation there is certainly not normal, but there is no nuisance. I would rather say the deliveries are not going smoothly,” Singh said on the sidelines of a conference jointly organized by the ministry and CII.
He clarified that India is moving towards importing coking coal from Russia, ruling out the possibility of halting investment or imposing sanctions. Imports of coking coal from India are estimated to be approximately 55 million tons for FY22.
India has already started investigating supplies of coking coal from other countries, such as Mozambique, according to a senior official at the Ministry of Steel.
Indian steel majors are already looking for new supplies outside of Russia and some have confirmed receiving coking coal from the US and Canada; apart from regular deliveries which include Australia.
Talks are reportedly underway (at company level) with mines in Venezuela, Mozambique and Brazil.
The ministry is in talks to come up with specific policy interventions to help the secondary steel sector, which can add value and help special steel production. Special steel, which accounts for about 45 percent of India’s production, is used in segments such as automotive, aerospace, defense and will also be required by the drone makers.
Some fine-tuning of the PLI scheme for special steels is also being considered. “Registrations for the PLI scheme have started and we are in ongoing discussions with the industry to see if there are opportunities for improvements,” Singh said.
