Tata Steel, India’s largest steel producer, bought around 75,000 tonnes of coal from Russia in the second half of May, according to two trade sources and one government source, weeks after swearing to cease all economic relations with Russia.
Tata Steel said in April that all of its production facilities in India, the United Kingdom, and the Netherlands had found alternate sources of raw materials to remove their reliance on Russia and that the company had made “a deliberate choice to cease doing business with Russia.”
Nonetheless, Tata Steel shipped approximately 75,000 tonnes of PCI coal, used in steel production, from the Russian port of Vanino in May, of which 42,000 tonnes were offloaded in a port in Paradip on May 18 and 32,500 tonnes in Haldia, according to two trade sources who requested anonymity because they were not authorised to discuss the matter.
A spokeswoman for Tata Steel stated, without elaboration, that the agreement to buy coal from Russia was reached prior to the company’s move to sever economic relations with Russia.
Tata Steel has not purchased PCI coal from Russia since the announcement, the company’s representative said in an email to Reuters.
India has refrained from criticising Russia, with which it has historic political connections, for its “special operations” in Ukraine, as described by Moscow. Instead, India has justified its purchase of Russian commodities as an effort to diversify its supply base, arguing that a sudden halt would increase costs and harm consumers.
Tata Steel was the only major steel producer to indicate it would cease trading with Russia. Other Indian steelmakers have been buying substantial volumes of coal from Russia, according to Reuters’ analysis of trade data.
The PCI coal was brought aboard the Panamax Ostria, according to trade sources. The official source acknowledged that Tata Steel purchased 75,000 tonnes of coal from Russia in May, but did not provide any other information. Tata Steel’s Russian coal purchases have not been previously published in detail.
Indian clients, particularly steelmakers, have increased their purchases of Russian coal in recent weeks, despite Western sanctions on Moscow, as brokers offer discounts of up to 30 %, Reuters reported on Saturday.
As a result of last month’s imposition of export taxes by the Indian government to combat domestic inflation, inexpensive coal supplies are of utmost importance to Indian steelmakers.
Since the decision to charge export taxes on May 21, the Nifty metals index has declined by more than 20 %, with Tata Steel plunging roughly 26 %, JSW Steel sliding 12 %, and Jindal Steel and Power’s shares losing 21 % of their value.
