Steel, India will ally with Russia on coal
To respond to the shortage of Australian coking coal supplies and protect steel production, India wants to create a consortium of state-owned companies. The plans also include an increase in purchases from Russia. All the details
India plans to create a consortium of state-owned companies to encourage imports of metallurgical coal (or coking coal) and reduce the risk of raw material shortages for the domestic steel industry. It seems that New Delhi wants to increase purchases from Russia, which has already become an important supplier of crude oil .
INDIAN STEEL MILLS HAVE A PROBLEM WITH COKEING COAL
The decision – anticipated by the newspaper The Economic Times thanks to information received from two Indian government sources – arises from pressure from steel producers, in difficulty due to high prices and limited supplies of coking coal. Indian steel companies consume approximately 70 million tonnes of coke every year, with imports meeting around 85 percent of total needs.
India is the second largest steel-producing country in the world, but its factories have problems with “volatile supplies” – as the Economic Times calls them – of metallurgical coal from Australia, which is usually worth more than half of Indian annual imports. New Delhi also imports coking coal from the United States, Indonesia, Russia and Canada.
WHAT THE CONSORTIUM OF STATE COMPANIES WILL DO
The consortium of state steel companies should facilitate, by virtue of its great economic weight, the imports of coking coal, allowing more favorable prices and sales conditions to be negotiated with suppliers; once imported, the metallurgical coal can be resold by the consortium to local steel mills. The Economic Times ' sources did not provide more details or the names of the companies involved in the plan.
INDIA BETWEEN AUSTRALIA, RUSSIA AND MONGOLIA
One of the objectives of the consortium will be to diversify imports of metallurgical coal, so as to reduce India's dependence on Australia. In particular, New Delhi will try to increase purchases from Russia, which also offers lower prices than Australian ones (but Canberra offers different varieties).
Before giving life to the consortium, however, the Indian government will reactivate negotiations with Mongolia on the coking coal trade. Although, according to sources from the Economic Times , Mongolia – a country rich in natural resources but landlocked – has not yet found a feasible route to transport the material to India.
As for Australia, in November Reuters revealed that the New Delhi government had asked the Canberra government to guarantee continuity of supplies of metallurgical coal. Continuity in shipments – the agency wrote – was disturbed by adverse weather conditions, slowdowns in the railway network and closures for maintenance of some plants. Last October the import price of Australian metallurgical coal reached $350 per tonne.
This is a machine translation from Italian language of a post published on Start Magazine at the URL https://www.startmag.it/energia/india-consorzio-carbone-acciaio/ on Tue, 09 Jan 2024 15:04:29 +0000.