india-increases-import-of-russian-coal-as-steel-production-increases
Finance & Markets

India increases import of Russian coal as steel production increases

Russia has increased the supply of coal to India, which has declared its readiness to import 40 million tons of raw materials annually. Sibanthracite Group, the Russian producer of high-quality UHG anthracite and metallurgical coal, reported a 140% increase in supplies to India. Russia caters to only 2.5% of Indian coking coal imports.

According to the company’s financial results of the first half of the year, Sibanthracite increased its coal sales to India by 140% compared to last year. In 2021, production of Sibanthracite increased by 22% – to 10.4 million tons, of which anthracite accounts for 6.3 million tons, and metallurgical grade T coal – 4.1 million tons, as per Kommersant.

Advertisement
Book Publicity India

As per Sibanthracite, India plans to increase steel production significantly and needs metallurgical coal. In March, Sibanthracite began shipping coal over 160 thousand tons by ships from the port of Taman. In the first half of the year, one Capesize-class bulk carrier was sent to India.

“The significant growth in sales in the promising Indian market is associated with the successful promotion of relatively new PCI brands, which have successfully proven themselves over the past year and have become highly demanded by consumers,” says the company.  PCI stands for pulverized coal injection.

As per analysts, Russian suppliers of anthracite reported the availability of volumes for spot sales in the Indian direction, but the demand exceeds supply. In June, prices for Ash coal rose to $145-150 per tonne CFR India ($135-140 per tonne CFR in May). The July shipments were at $160 per tonne.

India’s interest in large-scale purchases of Russian coal

The supply of up to 40 million tons of coking coal per year worth about $4.5 billion was discussed between India and Russia back in August 2020. In June, Deputy Energy Minister Anatoly Yanovsky said that India had indicated a figure of at least 40 million tons’ during the discussion of a memorandum between the Russian Energy Ministry and the Indian Steel Industry Ministry. The document has already been prepared; he said.

India has ambitious plans to increase steel production. According to Worldsteel, this year India is leading in terms of the dynamics of smelting growth. From January to May, Indian metallurgists smelted 48.6 million tons of steel, which is 33.6% more than in the same period last year.

The increase in supplies is significant for Russia, but not so significant for India. The annual imports of coking coal into India has reached about 45-48 million tons. Australia is the main supplier of coal to India, with 32.7 million tons in 2020. The United States and Canada are far behind it with 4.1 million and 3.4 million tons, respectively. Russia supplied India with just over 1 million tons of coking coal in 2020, which covers less than 2.5% of India’s coking coal imports. India is diversifying the import of coking coal imports and Russia sees itself as a benefiter in the medium term.

Written By

Frontier India News Network

Reply your comment

Your email address will not be published. Required fields are marked*