India to rely on imported coking coal for next decade at least

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India’s steel industry is expected to depend heavily on imported coking coal for the next decade at least on the back of new infrastructure projects and due to its stunted domestic production, speakers at the Coaltrans India conference in Goa said this week.

“The Indian steel industry will continue to depend on imported coking coal at least for the next 10 years,” said Prakash Thakur, senior manager at Essar Steel Limited.

The demand for coking coal, a major raw material in steel making, is expected to rise with the India’s steel output forecast to increase to 110 million-112 million mt in the coming financial year from last year’s 100 million mt, according to industry estimates.

“Domestic production of coking coal is likely to be low,” said Arvind Rajgopalan, assistant vice-president for commercial at JSW Steel Limited. A trader source said that the successful resettlement of people out of Jharia town in the state of Jharkhand could help hike the production.

Jharia is considered to have one of the largest coal reserves in India, most of it coking coal grade.

The Indian government’s initiatives to improve port infrastructure, roads and power distribution was ensuring steady steel demand, Rajgopalan said.

“India, the Middle East and Africa are where we see a sustainable increase in steel demand growth,” he added.

“[The path] to reach 300 million mt steel capacity by 2030, according to the new steel policy formed in 2017, seems on track,” said Rajgopalan.

Meanwhile, the risks to these estimates stem from timeline delays in the actual execution of the various projects that are being planned and budgeted by the government, steelmaker sources said.

Source: PLATTS