Coking Coal Scarcity Affects Indian Steel

The Indian government is focusing on the steel sector.

- Kuntala Sarkar

Bolstering infrastructure and industries will augur well for the sector. However, the steel industry is being impeded by scarcity of good quality coking coal- a key ingredient in steel making.

Indian coking coal demand to rise for steel industry

In the 2017-18 FY, India became the second largest steel producer in the world. India produced 102.22 million tonnes (MT) of crude steel during this time. According to data released by the Joint Plant Committee, Indian steel production in 2018 increased by 6% on a year-on-year basis to reach 52.25 MT. It is estimated that India’s crude steel production will trend to 125 MT by 2020.

The demand for coking coal can also be expected to increase in future. The monthly coking coal demand is expected to be higher, at around 6 MT, by the end of 2020-21 fiscal. This would mark around 20%-23% increase in the demand for coking coal. According to industry insiders, around 82% of the required coking coal in India comes from imports. The primary exporting states include Australia, Canada, and South Africa.