India seen becoming top coking coal importer

Posted on 10 October 2018

Source: Kallanish

India is forecast to overtake China as the world’s largest coking coal importer by 2020, according to Australia’s industry, innovation and science ministry. Because India has limited domestic coking coal reserves, it will increase imports to support its rapid steel industry growth.

India’s coking coal imports rose 26% on-year in the first half of 2018 to 28 million tonnes, when steel production grew 8.8%. Australia’s share in India’s coking coal imports declined from 90% in the March-2017 quarter, just before Cyclone Debbie, to 75%. Indian mills have turned to the US and Canada as alternative suppliers, with imports from the former more than doubling on-year in H1.

Indian coking coal imports are forecast to reach almost 73mt in 2020, when Chinese coking coal imports are seen at 69mt.

The premium hard coking coal spot price is forecast to decline from an average of $197/tonne in 2018 to $145/t in 2020. “The impacts of improved supply and weakening demand from China are expected to outweigh the impact of growing demand in India,” the ministry says in its latest quarterly resources report seen by Kallanish.

“Nevertheless, with strong demand growth expected from India, the price is expected to remain well above the lows of 2016,” the ministry adds.

India’s iron ore production is seen reaching 197mt in 2020. However, Indian consumption of iron ore is expected to exceed domestic production marginally in 2019, and by over 5mt in 2020, making India a net importer of iron ore, according to the ministry. Indian iron ore imports are seen at 19mt in 2020 versus 5mt in 2017, while exports will be 8mt versus 29mt.

In 2018 India is expected to overtake Japan as the world’s second-largest steel producer, with output reaching 108mt. In 2020 output is seen at 123mt, representing 7% of global production.

India’s steel consumption is forecast to grow strongly over the outlook period. It will be driven by rapid urban population growth, substantial government investment in infrastructure, housing and urban development, and a growing manufacturing sector, the ministry concludes. 

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