Indian steel companies are planning to increase the prices of various steel grades due to rising import costs of coking coal, particularly from major producer Australia, according to officials at four domestic steel mills who wished to remain anonymous.

Steel mills are expected to raise prices by $25 to $50 per metric ton by December. The price of Australian coking coal has surged by 50% to over $350 per metric ton due to various factors, including maintenance outages, reduced supplies from Queensland, and slower train networks, as stated by Banmeet Khurmi, a metallurgical coal analyst at the London-based CRU, a commodity-focused research group.

Australia accounts for over half of India's coking coal imports, which total around 55-60 million metric tons per year. India also sources coking coal from Russia and the United States.

In response to the higher prices of imported coking coal, Indian steel mills may increase their purchases from Russia due to discounts. The significant increase in the price of imported coking coal is expected to result in steel products costing at least $50 more per ton.

Last week, the chairman of Steel Authority of India (SAIL), the country's largest state-owned steel producer, noted that higher coking coal prices had already impacted the company's margins.

Despite the price hikes, steel companies anticipate the need to raise prices as demand for Indian steel rises, driven by increased construction and infrastructure-related activities following the monsoon season in September and early October. Some steel companies have already begun increasing prices for hot-rolled and cold-rolled products by approximately $12 to $24 per metric ton.

Prices for specific products, particularly flat steel products used in the automotive industry, have started to rise at a time when demand typically surges in October and November due to various festivals celebrated in India.