India’s coking coal’s seaborne movements

Next week, in Bali (Indonesia) the Coaltrans Asia conference will convene 8-10 September 2024. It is largest and longest-running coal event in Asia with BRS Shipbrokers attending.

In the Weekly Dry Bulk Newsletter (Issue 131) a senior dry bulk analyst wrote about India’s coking coal imports, see a summary of the article below. The analysis was picked up and cited by Lloyds List in its article: ‘Have Australian coal exports to China peaked?’ Link: https://www.lloydslist.com/LL1150492/

Please contact research@brsbrokers.com to obtain a copy of the report.

Summary: India’s import dependency on coking coal to feed its steelmaking industry India's dependence on coking coal imports to support its steelmaking industry continues to rise. According to the AXSMarine data, so far in 2024 India has imported a record 46 million metric tonnes of coking coal, up 2% year-on-year. India was the largest coking coal importer in 2023, with 68.3 mln mt. If a similar trend holds true, in absolute terms, this figure could surpass 71 mln mt this year. Despite being the second-largest crude steel producer globally, India's domestic coking coal supply remains inadequate, making up only 10% of the country's overall coal reserves, leading to reliance on imports.

India’s domestic coking coal in short supply. Most of India's coking coal is produced in Jharkhand. However, domestic coal often has higher ash content (20-40%) compared to imported coal (below 10%). This requires domestic coal to be washed before being used in steel production.

India’s steel production outlook. India's steel production surged in 2024, with crude steel production rising 13.2% year-on-year to 144 mln mt. This growth in steel production will likely increase demand for coking coal, further driving imports.

Where is the coking coal coming from? Australia has traditionally been India's largest coking coal supplier, but India has been diversifying. In 2016, Australia supplied over 85% of India's coking coal. By 2023, Australia’s share fell to 53%, with imports from Canada, the US, Mozambique, and South Africa increasing. Russia has also emerged as a significant supplier, accounting for 9.1 mln mt in 2024.

In sum, despite efforts to reduce import dependency, India's domestic coal supply issues and the higher ash content of local coal make imports, especially from Australia, a necessity for the steel industry.