Indian exports of finished steel are seen rising 3 MMT in 2022 to 12 MMT, conflating with a two year high of Russian coal imports in the same year.

Market participants expect a reduction of Russian and Ukrainian steel exports on the back of the war in Ukraine, which is likely to give way for Indian steel mills to increase their global footprint. US trade sanctions on Russia could extend to the steel industry, where Russia is a significant supplier to the US, and opening for Indian sellers. Meanwhile, disruptions to Ukrainian steel production are anticipated, amplifying the supply gap.

The growth in steel exports largely depends on energy prices and the country’s steel capacity utilization. Over the next four years, Indian steel capacity is set to increase by 40 MMT per annum, almost doubling the quantum of capacity added during the past four years.

An increase in Russian coal imports to India is expected as more competitive prices are offered to Chinese and Indian buyers. Already, 1 MMT of Russian coking coal and thermal coal are designated for delivery to Indian ports in March, the highest since Jan 2020. Despite facing payment issues, India is exploring ways to set up rupee payment mechanism with Russia.