India’s coking coal import is likely to rise by 5.7 per cent to 46 million tonnes, a record, in 2016-17. There has been a sharp increase in demand from steel mills, which have scheduled the commissioning of 6.7 mt of additional output capacity. Last year, coking coal import growth was flat, at 43.5 mt. An ICRA report estimates 46 mt for 2016-17 and 49.2 mt for 2017-18.

Tata Steel is to commission new capacities for 3.7 mt and JSW Steel for three mt. Following various protection measures imposed by the government, Indian mills would get room to raise production. Steel demand normally moves in line with growth in a coun try's gross domestic product. With the government’s increased focus on infrastructure development and investment on it, India’s steel consumption is estimated to rise by at least seven per cent this year. Steel output was a cumulative 89.8 mt for 2015-16, a marginal increase from 88.2 mt the previous year. In April–September this year, first half of the FY17 financial year, mills reported cumulative production at 47.8 mt, up from 44.6 mt in the corresponding period last year.

Interestingly, the growth in production was not supported by demand from consumer industries. Data compiled by the Joint Plant Committee shows steel demand rose only 0.5 per cent between April and August; it then surged in September.

“This means steel is stockpiled somewhere in the pipeline. But, an estimated 35 per cent (fall) in import is likely to filled by domestic steel mills, thereby raising demand for coking coal,” said an observer. A recent Moody’s report forecast India’s steel production to continue rising in the near future, with the government’s focus on infrastructure.

“We expect year-on-year steel demand in India to increase to high single-digit percentage in 2016 and 2017...as the country’s GDP growth of around 7.5 per cent in 2016 and 2017, based on Moody's forecast, remains among the highest in Asia. India’s reform and policy support for infrastructure and manufacturing, as well as increasing urbanisation, will drive steel consumption,” Moody’s had said.

 

Source : business-standard.com

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