After crude oil, India is now importing coking coal from Russia at a discounted rate. Among the government companies, Steel Authority of India (SAIL) has been the biggest beneficiary of this among state-owned companies. India is the world's largest importer of coking coal. Since Russia is facing Western sanctions from western countries, like oil, it is also selling its coking coal at a discounted price.
Major Indian steel makers such as SAIL, JSW Steel, and JSPL have increased their stocks of Russian coking coal this year. India is the second-largest producer of crude steel and also the largest importer of coking coal. Reportedly, India is also exploring ways to import regular supplies of Mongolian coking coal via Russia as New Delhi seeks to avoid over-reliance on transit through China.
Reportedly, SAIL's coking coal purchases from Russia rose by 30 per cent between January to August this year compared to 2023. SAIL's imports stood at 0.66 million tonne. State-run Rashtriya Ispat Nigam Ltd has also reduced its dependence on Australian and American feedstock by 19.4 per cent and 17.6 per cent, respectively. JSW imported 2.45 million tonne of Russian coking coal, a 65 per cent YoY rise. Jindal Steel and Power imported 1.09 million tonne. Imports from Australia for JSPL declined by 29.2 per cent YoY to 0.09 million tonnes. Only Tata Steel still continues to import coking coal from Australia.
Reportedly, Australia has been the biggest source of coking coal for India and accounted for 81 per cent of the total shipments to India. Russia was just 3 per cent and the US accounted for 8 per cent. But now with the changing dynamics and India's deeper relations with Russia, the country may become the biggest export of coking coal to India.
Discounts may benefit India immensely and also improve the bottom lines of the companies. In 2021, India had approved a memorandum of understanding with Russia for an institutional mechanism of cooperation regarding coking coal.
