Posted on 08 Aug 2024
India has shelved its plan to form a consortium of state-run companies for joint negotiations to import coking coal. This has come due to disagreements among mills regarding the grades they require, according to local press reports.
As the world's second-largest crude steel producer, India imports about 85% of its annual coking coal consumption of roughly 70 million tonnes, notes Kallanish.
While steel companies want to work together, a common buying system seems impractical due to varying grade/quality requirements of steel mills, explains a source familiar with the matter.
Some steelmakers believe they would lose discounts under their long-term deals if they negotiated through a consortium.
In January 2024, India hinted at its plan to develop a consortium of state-owned companies to facilitate coking coal imports.
This was intended to help domestic steel companies against global supply disruptions and volatile coking coal prices.
Last year’s erratic weather conditions disrupted coking coal supplies from Australia, which provides over half of India's annual imports, causing a significant price spike.
The steel ministry has also been encouraging mills to diversify import sources, including increasing purchases from Russia, and is working to secure a trade route for importing coking coal from landlocked Mongolia.
Source:Kallanish
