India Abandons Plan to Establish Consortium for Coking Coal Imports

The Government of India has reportedly put a halt to its plan to create a consortium for the import of coking coal. This decision comes amid concerns raised by certain steelmakers over the potential loss of discounts on their long-term contracts if they were to negotiate import deals through a proposed consortium. The intention behind forming a consortium was to consolidate India's bargaining power for coking coal imports, thus ensuring a steady supply and possibly better prices.

Steel Manufacturers' Concerns

Some steel companies have expressed concerns that their existing long-term agreements, which afford them certain price concessions for coking coal, could be compromised. They believe that sourcing through a consortium might eliminate these preferential rates. The discount loss apprehension has led to reluctance among these manufacturers, prompting the government to reconsider the consortium plan.

Impact on Coking Coal Imports

India's dependence on coking coal imports, chiefly from countries like Australia, is significant due to limited domestic reserves of the type of coal used for steelmaking. Forming a consortium aimed at securing better terms of trade could have potentially mitigated risks related to pricing volatility and supply disruptions. However, the current development has brought the focus back on maintaining individual contract terms between Indian steelmakers and coal suppliers.

India, Coal, Imports