KOLKATA (miningweekly.com) - The Indian steel industry would have to import 36.8-million tons of coking coal in 2012 to meet an estimated steel demand of 58.7-million tons. This import would increase to some 43.3-million tons in 2013 against a steel demand of 65-million tons, Gujarat NRE Coke chairperson Arun Kumar Jagatramka said.
“When Queensland catches a cold, the Indian steel industry starts sneezing. Steady and secured supplies of coking coal have become one of the prime challenges of the Indian steel industry,” Jagatramka said.
“The domestic production of coking coal has declined since 2004, but coke production has increased steadily during the same period and hence the future of Indian coking coal would be imports,” he said.
Indian coking coal production in 2008 was pegged at 23-million tons, slipped to 22-million tons in 2011 and 21.7-million tons was forecast at best in 2013. This compared with steel production of 55-million tons in 2008, which rose to 65-million tons in 2011.
Coking coal sourced from Australia accounted for 84.88% of total imports into India, followed by 10.36% from Indonesia and 3.45% from New Zealand.
“Australia will continue to have an advantage over other current or developing basins. Indonesia and Mozambique have geographical advantage in terms of proximity but quality, infrastructure and steady availability are much bigger questions in these areas,” Jagatramka said.
Total global demand for seaborne coking coal would increase to 386-million tons by 2020, up from 299-million tons at present. India’s import dependency on Australian coking coal would be in line with global trends since supplies from Australia would continue to account for 57% of global demand by 2030 against 59% at present.
Contribution to global supplies from Russian basins would increase to 5% against 3% at present, while that from the US would slip to 12% from current 23% and Australian supplies would continue to dominate global demand, Jagatramka said.
Dwelling on near-term outlook, he said that the coking coal market was moving into destocking and delayed buying and would pick up around mid-2012 but that things may change dramatically as the situation unfolds in the Bowen basin force majeure.
“Chinese demand remains the key driver and to balance demand, Chinese imports would have to be below the 25-million-ton-a-year mark, while any upsurge can destabilise the precarious demand supply scenario,” Jagatramka said.
Gujarat NRE Coke is the owner of two underground mines, NRE No1 and NRE Wongawilli, in NSW, Australia with reserves of 125-million tons and 651-million tons respectively. Gujarat NRE Coke would increase coking coal production from its Australian mines to six-million tons a year by 2015 up from 1.43-million tons a year at present.