India imported more coking coal during the first four months of FY27, even as the government continues to push for greater use of domestic coal. Coking coal imports through the country’s major ports reached 23.33 million tonnes between April and July, up 7.41% from the same period last year. The increase is closely linked to the needs of the steel industry, where domestic availability of suitable coking coal remains limited.
Steelmakers continue to depend on imports
Coking coal is one of the most important raw materials for the blast-furnace route of steelmaking. Indian steel producers import it mainly because domestic reserves are not enough to meet the industry's requirements in terms of both quantity and quality. The Ministry of Coal itself notes that steel companies use imported coking coal to bridge the gap between domestic availability and requirements, while also improving the quality of the coal blend used in steelmaking.
The latest import numbers therefore do not necessarily point to a sudden change in buying behaviour. They also reflect the fact that India's steel production is continuing to grow and mills need a steady supply of suitable raw materials. With finished steel consumption also running ahead of domestic production, as seen in the latest April-July data, the demand for steelmaking inputs is likely to remain firm.
The numbers behind the increase
The latest port data gives a fairly clear picture of the movement during April-July:
- 23.33 MT of coking coal moved through India's major ports
- Imports were 7.41% higher than a year earlier
- Iron ore and pellet traffic also increased 8.06% to 18.29 MT
- The rise in coking coal imports came despite efforts to reduce India's overall dependence on imported coal.
The difference between coking coal and thermal coal is important here. India has been able to reduce imports of coal used by the power sector as domestic supplies have improved, but coking coal is a different problem because steelmakers need specific grades and domestic resources remain relatively limited. In April alone, total coal imports fell nearly 13% year on year, while coking coal imports actually increased marginally, showing how difficult it is to reduce dependence on this particular raw material.
Domestic coal is not enough for steel
India has made considerable progress in increasing domestic coal production. Coal production reached 69.75 MT in July, up 7.51% from a year earlier, while cumulative production for April-July stood at 302.24 MT, up 5.87%. But most of this growth is relevant to the wider coal market and does not remove the specific requirement for imported coking coal used by integrated steel producers.
This is likely to remain the case for some time. Increasing domestic coking coal production can reduce the dependence gradually, but steelmakers still need the right quality of coal and reliable supply. For mills, the cost and availability of imported coking coal will therefore remain an important part of the production equation.
What it means for steel costs
The increase in imports also puts the focus back on coking coal prices. Any sustained rise in international prices can quickly increase the cost of producing steel, particularly for integrated producers using blast furnaces. At the same time, steelmakers cannot always pass higher raw-material costs on to customers, especially when finished steel prices are under pressure.
This makes the coking coal market important not only for miners and traders but also for Indian steel producers. If steel demand remains strong and mills continue to increase output, import requirements could stay elevated even as India works on expanding domestic supplies.
Imports are likely to remain part of the mix
The latest figures do not suggest that India's dependence on imported coking coal is disappearing. Instead, they show the practical limitation of trying to substitute imports when domestic availability and quality do not fully match what steelmakers need.
For the Indian steel industry, the bigger issue will be the cost of that dependence. As steel production and consumption grow, the country will need more coking coal, and for now a significant part of that requirement will continue to come from overseas.
Disclaimer: This article is for information and market discussion purposes only. It is based on publicly available information and should not be considered investment or trading advice.