India will ramp up coal shipments directed from Russia
Date
11/29/2023 7:34:55 AM
(MENAFN) In a strategic shift, India is reportedly planning to augment its purchases of Russian coking coal, a critical raw material for the steel industry, following a decline in deliveries from its former major supplier, Australia. government and industry sources revealed that Russia is offering more competitively priced coking coal compared to Australia, traditionally the source of over half of India's annual imports of approximately 70 million tons.
According to Reuters, Australian coking coal prices surged by 50 percent to over USD350 per metric ton last month, attributed to factors such as maintenance outages, lower supplies from Queensland, and disruptions in the train network. Despite assurances from Australia earlier this month regarding stable commodity supplies, India is reportedly exploring diversification in its imports basket.
Indian steelmakers have been increasingly capitalizing on the favorable pricing and quicker deliveries from Russia since last year. The Indian Ministry of Commerce and Industry reported that Russia emerged as the third-largest supplier of coking coal to India in the first eight months of 2023. Shipments from Russia surged by 2.3 times year-on-year, reaching 4.3 million tons. Notably, Russia's share of India's overall coking coal imports rose from 5 percent to 11.2 percent during this reporting period.
As Indian buyers and Russian suppliers work through payment mechanism challenges, sources suggest that the country's steel mills are poised to boost coking coal supplies further. Some Russian suppliers are reportedly open to further price reductions, creating an opportune situation for India to enhance its strategic partnerships and ensure a stable supply of vital raw materials for its steel industry.
The evolving dynamics in India's coking coal procurement strategy underscore the complex considerations and geopolitical shifts influencing global commodity markets. The move also reflects India's proactive measures to navigate supply chain challenges, ensure resource security, and capitalize on favorable pricing in the international coal market.
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