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Coking coal jumps 25%, pressuring India’s steelmakers’ margins
India imports up to 95% of its coking coal demand, leaving steelmakers exposed as Australian premium met coal FOB prices rose 25% in the first seven months of the year.
Indian steelmakers are facing margin pressure and delays to capacity expansion as coking coal prices have jumped this year, according to analysts and industry executives cited by Reuters.
India relies on imports for as much as 95% of its coking coal, also known as metallurgical coal, which is an essential input to the steelmaking process.
Reuters reports that premium coking coal freight on board in Australia surged 25% in the first seven months of the year versus the same period last year, as supply disruptions and higher costs tightened the seaborne market.
The price increase has been linked to slower ramp-up of new mines, higher prices driven by the Iran war, disruptions at key producer Australia, and a deadly coal mine explosion in China’s Shanxi province that killed more than 80 people, Reuters adds.