India, a significant player in the global steel industry, is embarking on a pivotal trial import of coking coal from Mongolia, slated to commence by the end of July. This initiative, reported by Reuters and corroborated by industry sources, aims to mitigate the country's heavy reliance on Australian coking coal, which currently fulfills a substantial portion of India's raw material needs.
JSW Steel, one of India's largest steel producers, anticipates receiving approximately 30,000 metric tons of Mongolian coking coal, marking its second such import since 2021. Similarly, the state-owned Steel Authority of India is expected to procure between 3 to 5 thousand metric tons. These initial shipments are viewed as crucial trials to assess the viability and quality of Mongolian coal for India's steel manufacturing sector.
The logistical framework for this trial involves shipping the coal via Chinese ports, highlighting the intricate global supply chain dynamics at play. However, amidst geopolitical uncertainties, Indian authorities are exploring alternative routes to ensure consistent and reliable supplies from Mongolia, renowned for its superior quality raw materials.
Indian steelmakers, collectively consuming approximately 70 million metric tons of coking coal annually, heavily rely on imports to meet about 85% of their total requirements. The volatility in Australian supply chains, exacerbated by recent disruptions and geopolitical tensions, has spurred Indian companies to diversify their sourcing strategies.
In parallel, Indian steel manufacturers have increasingly turned to Russian coking coal imports, leveraging competitive pricing amidst Western sanctions. This strategic diversification underscores India's proactive stance in securing stable and cost-effective raw material inputs essential for sustaining its robust steel production capacity.
