Asia’s imports of coking coal experienced a significant decline in February, reaching their lowest level in three years due to decreased demand from prominent buyers like China and India. Despite this downturn, indications suggest that the dip may be temporary, with a potential recovery in imports expected as early as April.
In February, Asia’s seaborne coking coal imports fell to 15.85 million metric tons from 20.42 million in January, the lowest figure since February 2022, according to commodity analysts at Kpler. India, the leading importer, reported a drop to 4.56 million tons in February, down from 6.26 million in January, marking its weakest import level since December 2021.
With India’s steel production showing a modest increase in the current fiscal year, reaching 124.8 million tons over ten months, recent months have revealed softer output due to higher imports and government restrictions on coke imports. To encourage domestic production, India imposed quantitative restrictions on low-ash metallurgical coke imports, limiting the total to 1.4 million tons from January to June.
However, some local producers raised concerns about the quality of domestic coke, with at least one company indicating a potential output cut starting in April. Furthermore, India has seen a record surge in steel imports, which prompted the government to consider implementing a temporary safeguard duty of 15% to 25% to protect domestic steel manufacturers.
Meanwhile, China’s coking coal imports also declined, falling to 2.88 million tons in February, an 18-month low. This was influenced by seasonal reductions in steel production and an increase in overland coal imports from Mongolia.
Additionally, China has enforced a 15% tariff on U.S. coking coal imports, affecting trade dynamics. As a result, China may need to seek alternative suppliers, likely turning to Australia and Canada, which could support seaborne prices despite reduced volumes in February.