22/01/26
India's steel expansion to drive coking coal demand
India's steel expansion to drive coking coal demand
Mumbai, 22 January (Argus) — As India's steel production capacity increases,
demand for coking coal is expected to remain strong, reinforcing the country's
position as the world's fastest-growing importer of seaborne coking coal. India
is the world's second largest crude steel producer with output over
January-November 2025 totalling 150.1mn t, the latest data from Worldsteel
Association show. Major Indian steel producers have registered steady or even
record output in the third quarter of the April 2025- March 2026 fiscal year,
driven by firm domestic steel demand. India aims to double its steel production
to 300mn t/yr by 2030, and reach 500 mn t/yr by 2047, reinforcing its position
as a major seaborne coking coal buyer. Alongside its ambitious expansion
initiatives, India has extended safeguard duties on specific flat-steel products
for three years to protect the domestic industry from lower-priced imports.
These protective measures are designed to preserve India's steelmaking capacity,
reducing dependence on imported semi-finished products for further processing.
Met coal prices, imports up As steel production increases in India, both the
demand for and prices of steel feedstocks such as metallurgical coal have also
steadily climbed. On pricing, recent outages and force majeure declarations in
Australia because of heavy rain pushed the Australian premium low-volatile (PLV)
hard coking coal price to a 17-month high of $240.55/t fob on 21 January.
Reflecting firm demand, metallurgical coal imports into India rose sharply in
2025 with volumes rising by 32pc on the year to 73.53mn t, data from shipbroker
Interocean show. For December, imports climbed by 97pc on the year to 7.32mn t.
This trend is continuing in 2026, with Indian steelmakers seeking a total of
around 75,000–100,000t of metallurgical coal via tenders as of 21 January.
Australia remained India's top supplier, with December shipments rising by
nearly 40pc on the year to 3.29mn t. Inflows from the US, Mozambique and Russia
have also gone up. Higher steel margins and restocking needs encouraged mills to
secure volumes despite the elevated prices, market participants said. India's
coking coal imports are projected to stay strong, with inflows of about 81.6mn t
in 2026 and 86.5mn t in 2027, according to a report by Argus consulting
services. The anti-dumping policy on low-ash metallurgical coke from major
suppliers is expected to have a slightly positive effect on imports for six
months, it added. Coal demand rides on policy tailwind Steel prices in India
have been on an uptrend as the market rebounds on the back of improving
macroeconomic conditions and robust demand. Traders and mills are also citing
the recent introduction of safeguard measures as a key driver, as these
protections are expected to boost domestic steel consumption. The combined
effect of firmer demand expectations and policy support has helped lift
sentiment, with Indian buyers showing greater willingness to restock at higher
levels, a trader said. Steelmakers could also be nudged towards higher domestic
coke production as coke imports could be curtailed with the implementation of
anti-dumping duties , spurring demand for premium hard coking coal imports for
blending, particularly Australian material, Argus consulting services said.
India to stay a key buyer Looking ahead, India is expected to remain a key
driver of coking coal demand, as ongoing steel production growth supports import
needs. "India has the biggest role to play given the fact that it is going to be
the largest sea borne customer in all the years to come unless China starts
buying [more meaningfully]," an India-based trader said. Import requirements are
likely to rise substantially — potentially by 100% — as capacity expansions in
the steel sector are rolled out, he added. India is set to add more blast
furnaces over the coming years as steelmakers push ahead with capacity expansion
and each new blast furnace will raise metallurgical coal demand, another trader
said. By Romil Sethi and Lisa Cheng India metallurgical coal imports ('000 t)
Origin Dec'25 Dec'24 ± % Jan-Dec'25 Jan-Dec'24 ± % Coking coal Australia 3,292
2,355 40 35,403 30,825 15 US 1,218 433 181 9,675 9,118 6 Mozambique 712 172 314
5,524 3,856 43 Indonesia 333 55 506 3,459 2,109 64 Russia 1,159 453 155 12,411
6,725 85 Others 573 82 598 5,438 869 526 Total 7,323 3,714 97 73,533 55,917 32
Met coke Indonesia 94 452 -79 961 2,521 -62 China 0 13 -100 308 825 -63 Poland 0
0 n/a 486 613 -21 Colombia 33 17 93 353 241 46 Total 171 586 -71 2,762 5,052 -45
PCI Australia 284 668 -57 2,392 5,780 -59 Russia 640 1,255 -49 7,206 11,651 -38
Total 924 2,042 -55 10,814 17,558 -38 Source: Interocean *Note: Total includes
additional small values excluded from individual breakdown, so component numbers
may not sum to total India steel expansion to drive coking coal demand [$/t]
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