State-owned Steel Authority of India Ltd (SAIL), the largest steel producer in the country, is ensuring it has adequate coking coal stock through imports from Russia and will complete imports of 300,000 tonnes from Russia by the end of this month.
The company is looking to bring in 3,00,000 tons of coking coal by the end of this quarter (July – Sept), Amarendu Prakash, Chairman of SAIL, told Mint on the sidelines of the Indian Steel Markets conference.
“It is a continuous thing; we buy from them continuously. Recently, I believe, in the last quarter, we had taken 6 ships from that translates to 3 lakh tons,” he added. Last quarter, the company imported three ships with 75,000 tons of coking coal each and is in the process of completing the import of four more.
Considering this, the company through its SPV, a joint venture between PSUs, International Coal Ventures Private Limited (ICVL) is also looking to double up the capacity of the Benga coal mine in Mozambique, the chairman added. At present, ICVL has a 2 MTPA (million tonnes per annum) capacity.
“Right now, importing from Russia has proven to be a lot cheaper as compared to importing coal from other nations,” Prakash added when asked about the cost of importing from Russia as compared to Australia. “Geographically we are trying to diversify our sourcing, we have long-term suppliers from Australia, and now we have long-term suppliers from Russia,” he added.
While SAIL continues to import its requirements from Russia, data from S&P Global Commodities at Sea shows India’s imports of Russian coal between May 22 and July 23 slipped to 5.6 million mt from 6.1 million mt as compared to a similar period a year ago. In contrast, Russia and Turkey have registered an increase in imports from Russia during the same period.
The company has been working with Australia, Indonesia, and Mozambique to secure coking coal. But prices of premium hard coking coal (PHCC) from Australia have been showing a sharp increase due to limited supply as some of the mines down under have suspended their operations. Issues compounded as the Indian mills consistently bid to stock up ahead of post-monsoon demand upturn.
Concerned about the rising prices, Prakash said that the proliferating prices of coking coal have been a direct hit on the company’s margins. The import of cheaper coal from Russia helps provide that cushion to the steel major.
Source: Hellenic Shipping News
