India’s largest steelmaker, JSW Steel, is facing setbacks [1] in its efforts to source coking coal from Mongolia due to unresponsive suppliers and logistical constraints, sources familiar with the matter revealed.
The company had planned to import 2,500 metric tons from Mongolia, while the state-run Steel Authority of India Limited (SAIL.NS) sought a larger shipment of 75,000 metric tons. As the world’s second-largest crude steel producer, India relies on imports for 85% of its coking coal needs, with Australia supplying more than half of these volumes. Rapid economic growth and infrastructure expansion have further heightened demand for the critical steelmaking ingredient.
In an attempt to diversify its sourcing strategy, India has explored partnerships with Mongolia, identified as a potential supplier of high-grade coking coal at competitive prices. However, discussions have stalled, with industry insiders citing a lack of response from Mongolian counterparts.
“There is no response from the Mongolian side, and we are finding it difficult,” one source noted, underscoring the complexity of securing stable imports. Additionally, transportation challenges exacerbate the issue, with clogged transit routes from Russia and uncertainties surrounding supply viability from China.
Steel Secretary Sandeep Poundrik acknowledged over the weekend that logistical hurdles persist in procuring material from landlocked Mongolia. The Mongolian prime minister’s office and JSW Steel have yet to respond to inquiries regarding the matter.
India-China relations, strained since the 2020 border conflict, further complicate trade engagements. While both nations agreed earlier this year to address economic differences, industry experts remain cautious about the feasibility of sustained coal imports from China.
Separately, JSW Steel, which sources about one-third of its coking coal from Russia, has no immediate plans to expand imports from Moscow, citing a need for geographic diversification. The company also procures supplies from Australia, the United States, and Mozambique.
CEO Jayant Acharya recently noted that JSW Steel remains open to acquiring coking coal assets, provided they align with commercial and strategic interests. Meanwhile, India’s steel sector is set to ramp up capacity, fueling further demand for imported coking coal despite ongoing supply constraints.
Sources:
[1] India’s JSW Steel faces challenges importing coking coal from Mongolia, sources say https://www.reuters.com/world/china/indias-jsw-steel-faces-challenges-importing-coking-coal-mongolia-sources-say-2025-05-01/