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The Indian government is reportedly to formally request Australia to implement measures ensuring a consistent flow of coking coal in response to falling supplies and rising prices of the material, Reuters reported, citing four sources.
Nagendra Nath Sinha, the top official at India's Ministry of Steel, is scheduled to meet with Philip Green, Australia's high commissioner to India, discussing India's need for coking coal.
With Australia currently contributing more than half of India's annual coking coal imports of approximately 70 million tonnes, the discussions aim to address the challenges posed by erratic weather conditions affecting coal supplies from Australia.
Although Indian steel mills have been exploring alternatives, including sourcing from countries like Russia where prices are relatively lower, certain producers, especially those reliant on specific grades of the commodity, still depend heavily on Australia.
The Steel Authority of India (SAIL), one of the major steelmakers in the country, has expressed interest in boosting coking coal purchases from Russia due to the cost advantage, according to statements from SAIL Chairman Amarendu Prakash last week.
In addition to Australia and Russia, India also imports coking coal from the United States.
Australian coking coal prices witnessed a significant 50% surge to surpass $350/t last month, due to factors including maintenance outages, reduced supplies from Queensland, and delays in the train network.
In response to the rising costs of coking coal, Indian mills are reportedly considering price hikes for various steel grades.
(Writing by Emma Yang Editing by Harry Huo)
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