In an effort to ensure a stable supply of coking coal and manage costs, Steel Authority of India Ltd (SAIL), the country’s largest steel producer, has ramped up its imports of coking coal from Russia. SAIL plans to complete imports of 300,000 tonnes of coking coal from Russia by the end of the current quarter (July – Sept), according to Amarendu Prakash, Chairman of SAIL.
Chairman Prakash stated that SAIL’s coking coal imports from Russia are ongoing and that the company had recently received shipments totaling 300,000 tons, equivalent to six ships in the last quarter. The company is also in the process of completing the import of four more ships.
Highlighting the cost advantage, Chairman Prakash noted that importing coking coal from Russia has proven to be more cost-effective compared to imports from other nations. SAIL’s approach to diversify its sourcing strategy includes long-term suppliers from both Australia and Russia.
To further bolster its coking coal supply, SAIL, through its special purpose vehicle (SPV) in collaboration with International Coal Ventures Private Limited (ICVL), is looking to double the capacity of the Benga coal mine in Mozambique. Currently, ICVL has a capacity of 2 million tonnes per annum (MTPA).
The increased focus on imports from Russia is partly driven by the challenges associated with sourcing premium hard coking coal (PHCC) from Australia. Limited supply due to mine suspensions has led to a sharp increase in PHCC prices. Indian steel mills, in anticipation of post-monsoon demand, have consistently bid for coking coal, further exacerbating price pressures.
Chairman Prakash expressed concern about the rising prices of coking coal, which have directly impacted the company’s margins. The import of more affordable coal from Russia is helping SAIL mitigate the impact of rising costs and maintain its competitiveness in the Indian steel industry.
While SAIL continues to import its coking coal requirements from Russia, data from S&P Global Commodities at Sea indicates that India’s imports of Russian coal between May 22 and July 23 slightly decreased compared to the same period in the previous year. In contrast, Russia and Turkey have witnessed increased imports from Russia during the same period, highlighting the global dynamics of the coking coal market.
SAIL’s efforts to secure a stable and cost-effective supply of coking coal align with its commitment to maintaining its position as a leading player in the Indian steel industry.
