Indian Coking Coal Demand To Rise, Says ISA

India’s met coal demand is estimated to increase to meet the needs of a fast-growing steel sector.

- Tamajit Pain

Recent consolidation in India’s steel sector, and greater international participation, should help ensure the industry is on a surer footing going into its next growth phase, according to Bhaskar Chatterjee, Secretary General at Indian Steel Association (ISA).

It is estimated that India’s crude steel production will trend towards 125 million tons by 2020, a 22 percent increase from 2017-18 level of production. Hot metal output could increase to 82 million tons, from 67.74 million tons reported for 201718. Based on the “rule of thumb” for India that 1 million tons of hot metal requires 0.85 million tons of coking coal, it is estimated that coking coal demand will be at 70 million tons by 2020. This would mark a 23 percent increase in coking coal demand from 2017-18 levels. Monthly coking coal demand is therefore forecast to trend higher towards 6 million tons at the end of 202021, Chatterjee said while speaking at the Indian Coal Markets Conference organized by mjunction services limited.

One of the key market implications could be the mining majors potentially benefiting from India’s growing appetite for coking coal. Since the start of 2017-18, major Indian steelmakers have been seeking to secure long-term contracts with miners, ensuring reliable supply. This comes at a time when large steelmakers are looking to boost efficiencies and lift capacity utilization rates after acquiring distressed steel assets that were operating well below capacity, he said.