How India is catching up with Japan in steel production

Steel production in India is close to that of Japan, the world's second largest steel producer. Japan, along with the faster growing South Korea, remains a key market for high volume coal metallurgical contracts.

While India may catch up with Japan in steel production, India is still trying to diversify its further dependence on coking coal in Australia. Much more of India's steel production comes from factories outside of the main integrated plants.

Japan produces more steel than India, but Australia exported nearly twice as much high-quality coking coal to India as it shipped to Japan, according to the data. Japan has much higher blast furnace performance and wider sources of coal than India, but the country's blast furnaces consume more coal.

Indian steel production in January-September was 75.3 million tons, compared with 78.3 million tons in Japan, according to World Steel Association data released this week.

Data from the World Steel Association show a mixed picture of the annual growth rates in the two countries in recent months. India's direct reduced iron production using thermal coal and natural gas as iron reducing agents helps explain India's higher level of steel production.