Indian Steelmakers Head Northeast Under Impact of Coking Coal Prices

Flat steel prices in India jumped by nearly 25 per cent in just two months following the Ukraine war. However, subsequently, thanks to a drop in raw material prices, imposition of export duty by the Government of India, and rising stock levels the prices of flat steel cooled off. These prices are set to turn the corner with input costs for Indian producers heading northward. And it does not require any rocket science to understand this.

Mind you that the Indian steel industry imports nearly 90 per cent of its coking coal requirement, majorly from Australia. While their prices were on a declining trend for most of this fiscal, short-term volatility was observed in anticipation of supply chain disruptions. Easing of China's unofficial ban on Australian-origin coal import will not only add to further volatility but also alter the supply chain, yet again. While there are reports that three power plants and one steel player in China have already been given the go-ahead to purchase Australian coal, more entities are likely to be allowed. That's what a recent study by CRISIL Research has suggested.