Indian steel companies will increase prices of coking coal along with high costs

According to officials of four major domestic steel mills in India, Indian steel companies will increase prices of various alloy grades due to rising coking coal import costs, especially those from their major producer Australia.

Steel producers will likely increase rates by $25 to $50 per metric ton by December, according to officials speaking anonymously on media channels.

Banmeet Khurmi, a metallurgical coal analyst at London-based CRU, said Australian coking coal prices rose 50% to more than $350 per metric tonne due to factors including maintenance outages, lower-than-usual supplies from Queensland and a slowing trend in the train network.

India imports around 55-60 million metric tons of coking coal annually, and more than half of this amount is brought from Australia.

India meets its coking coal needs by importing from Russia and the USA.

Company officials also said that Indian steel producers, attracted by discounts, may turn to Russia to buy much larger quantities of coking coal.

According to officials of one of the companies, judging by the increase in the cost of the special steel products produced by the company, the sharp increase in the price of imported coking coal will result in the final product being at least $50 more expensive per ton.

Last week, Amarendu Prakash, chairman of the Steel Authority of India (SAIL), the country's largest state-owned steelmaker, said high coking coal prices were already affecting his company's margins.

Authorities say there is an increase in demand for Indian steel due to the decrease in monsoon rains in September and early October and the increase in construction and infrastructure activities. On the other hand, it is an expected scenario that steel companies will have to raise prices.

Dhruv Goel, managing director of research group SteelMint, also reported that some steel companies have started increasing prices of hot-rolled and cold-rolled products by about $12 to $24 per metric ton.

Prices of certain products, especially flat steel products used in automobiles, started to increase in parallel with the increase in demand with the arrival of October and November, when Indians have a number of holidays.