Lower global prices pushed coking coal import up 13%

Coking coal prices have come down to $150 a tonne at major Indian ports, compared with $177 a tonne in March

Coking coal traffic at major Indian ports went up 13 per cent in the April-July period to 11.2 million tonnes, up from 9.9 mt in the same period a year before, indicating higher import demand for the steel- making fuel.

Major increases were seen at Mormugao with 26 per cent growth, followed by Paradip and Kolkata, each with 17 per cent rise, data from the Indian Ports Association showed.

The surge in imports was because of declining coking coal rates in international markets, buyers said.

“Coking coal rates have come down to $150 a tonne at major Indian ports compared with $177 a tonne in March, due to better supply from non-traditional suppliers such as Mongolia. The traders took the advantage and booked more,” said an official of Neelachal Ispat Nigam, which imports coking coal worth Rs 900 crore a year.

However, between April and July the rupee softened by a little more than 10 per cent against the dollar, making imports costlier. Traders and industry observers said the rush for import despite the costlier dollar does not indicate short supply in the Indian market. “A large number of steel plants and other end-users have booked coking coal due to lower prices as they find it lot cheaper than buying coke. They can convert coking coal into coke here at a cost of $195 a tonne, while readily available coke is traded at $260 a tonne at ports. That’s why  imports rose even as the rupee fell,” said Ganesh Natarajan, chief executive of Ennore Coke, manufacturer of metallurgical coke.

Coking coal, after conversion into coke, is used as a fuel to produce steel from iron ore. India buys about four mt coke and 28 mt coking coal every year, mainly from Australia and Indonesia.