India: Crude coal tar supply declines in Mar'26 amid strong demand and tight availability

• Supply tightness supported prices despite lower auction volumes
  
  
• Buyer caution likely to pressure prices in upcoming auctions
  
  

The total quantity of crude coal tar offered through plant auctions in India declined sharply to 24,598 tonnes (t) in March 2026, indicating a notable month-on-month reduction in availability, as per auctions tracked by BigMint. The lower supply from integrated steel plants limited market liquidity and contributed to the firm price trend observed during the month.

According to BigMint's monthly assessment, ex-works East India crude coal tar prices declined sharply by INR 15,450/t m-o-m to settle at INR 50,450/texw Rourkela in March 2026, primarily reflecting demand-side caution following earlier elevated price levels and buyers reluctance to accept higher bid expectations in certain plant auctions.

Among the key suppliers, Steel Authority of India Limited (SAIL) Bhilai offered 3,006 t, with the entire volume successfully booked, reflecting healthy buyer participation. Similarly, SAIL Rourkela offered 2,000 t, which also witnessed complete offtake.

At SAIL Durgapur, a total of 8,000 t was offered across two separate auctions. While the first 4,000 t lot received full bids and was entirely sold, the second 4,000 t auction remained unsold as buyers refrained from matching higher price expectations.

Meanwhile, NMDC Limited's Nagarnar plant offered 5,600 t across two auctions, adding to the overall monthly supply in the market. RINL also offered 840 t with the entire volume successfully booked.

Supply linked to coke oven operations

The supply of crude coal tar in India is directly dependent on met coke production at integrated steel plants such as SAIL, Tata Steel, and JSW Steel. During March, variations in coke oven operating schedules and intermittent maintenance activities at certain facilities limited the generation of coal tar as a by-product. The constrained availability from these sources tightened supply in the market, supporting the upward movement in prices.

Competitive bidding in steel plant auctions

Crude coal tar in India is predominantly sold through auctions conducted by steel producers. The limited lot sizes offered during March, coupled with strong downstream demand, resulted in intense competition among buyers during plant auctions. Aggressive bidding in several auctions pushed price levels higher, although instances of unsold lots - such as at SAIL Durgapur - indicated that buyers remained cautious when price expectations exceeded workable margins.

Financial year-end procurement activity

March typically witnesses increased procurement activity due to the financial year-end in India, as processors seek to secure adequate raw material before potential contract adjustments or price revisions in April. This seasonal buying trend further intensified demand and contributed to the upward price movement.

Market feedback: Concerns over long-term supply agreements

Market participants indicated that entering into long-term supply arrangements such as MoUs may not be practical in the coal tar market, given the high volatility in prices. Fixed-price or semi-structured agreements could expose buyers to financial risks if market prices move sharply, making spot-based procurement through auctions a more flexible option.

Outlook

India's crude coal tar prices are expected to ease in the upcoming auctions due to cautious buying sentiment and buyer resistance to higher price expectations following recent market volatility.