Posted on 22 Apr 2022
India's private-sector Tata Steel plans to stop doing business with Russia, adding to a long list of global companies that have severed ties with Moscow after the invasion of Ukraine.
"We have taken a conscious decision to stop doing business with Russia," Tata Steel Europe said yesterday. "To ensure business continuity, all our steel manufacturing sites in India, the UK and the Netherlands have sourced alternative supplies of raw materials to end its dependence on Russia."
Tata buys coking coal, a key steelmaking raw material, from Russia. Import volumes are unclear. But the "Russian share of met coal imports were not very significant for Indian operations. We have been able to diversify sourcing from other major coking coal suppliers," a company official said. Australia, United States, Canada, Indonesia and Mozambique are some of the other major global met coal suppliers.
Russia supplied about 22pc of India's 2.52mn t pulverised coal injection (PCI) imports and about 2.2pc of the 952,000t of coking coal imported between April 2021 and January 2022, the first 10 months of the Indian financial year. Australia is the top supplier of both coking coal and PCI to India.
"Without ample PCI, the blast furnaces will require more coking coal and if that is fulfilled from Australia, the plant will run at a higher cost, leading to cost passing to customers," another company official said.
Indian domestic hot-rolled coil (HRC) prices surged to a record peak of 78,500 rupees/t ($1,030/t) on 8 April as mills raised prices multiple times over the last two months to cope with higher input costs. Prices have since dipped in response to lukewarm demand.
Premium hard low-volatile coking coal prices to India on a cfr east coast basis were at $539/t on 20 April, dropping by 23pc since hitting a record peak of $698/t on 11 March but still over 300pc higher on the year.
The Russia-Ukraine conflict that started in late February led the US, EU and other nations to impose severe sanctions against Moscow, including banning some Russian banks from global financial messenger service provider Swift.
The restrictions have prompted some buyers to seek alternative sources of raw material supply. The EU this month announced it will impose an embargo on imports of Russian coal and other solid fossil fuels from August.
India and Russia signed an initial deal on coking coal co-operation last year. Tata's move comes despite the Indian government taking a neutral stance on the conflict.
Some Indian buyers remain in the market for Russian coal that is being offered at a discount.
Source:Argus Media
