According to the vessel line up data maintained by SteelMint Research, India’s share of coal imports from RBCT has recorded phenomenal growth during the first 20 days of June.
RBCT is the premium coal exporting terminal of South Africa, with a designed coal handling capacity of 91 MnT per annum.
Total coal shipped to India during the first 20 days of Jun’18 were marked 2.55 MnT against 1.21 MnT coal imports during the corresponding period in May’18, recording a whopping 111% growth on the monthly basis.
The following factors may have triggered higher imports in Jun’18:
1. Decline in coal-stock at power plants leading to domestic supply cut for non-power sector
The rise in power demand for summer season depleted coal stocks at the power plants which were having a coal stocks coal sufficient for 10 days of power generation in May’18.
In order to revive the condition at the thermal power plants, the coal ministry had again favored the power producers for the coal supply.
Market reports had claimed that Vedanta Ltd had raised concerns regarding a decline in coal supply to its Aluminium smelter at Odisha. The company had informed that Mahanadi Coalfields Ltd (MCL), one of the subsidiaries of CIL operating in Odisha, had halted coal supply to non-power customers following a government directive to prioritise the power sector.
Although, MCL had not come up with an official circular regarding the coal supply cut, unlike the previous year when the company had given prior intimation to its non-power customers of a 20% cut in monthly coal allocation during Sep’17-Dec’17, in order to augment coal supplies to the power sector.
However, the company had halved the coal quantity offered in the monthly spot e-auctions to 0.5 MnT in May’18.
2. Strong Demand for Monsoon Stocking:
South African non-coking coal is of good value for Indian sponge manufacturers, which yields higher Fixed carbon to Volatile matter ratio required in the kilns.
However, the market participants were said to have waited for the prices to soften which were effectively increasing since Mar’18. Consequently, RBCT coal export to India was slightly lower in Apr’18.
With South African prices defying any sort of correction in May’18, the end users, were seen in a buying spree after waiting too long to book their vessels, which nearly take 15-20 days to reach India ports. Generally, Indian importers stock sufficient coal before the monsoon period, which had also resulted in higher imports during the period.
RBCT Coal Export Analysis (Comparison of first 20 days of May’18 & Jun’18)
Largest coal quantity was imported in Vizag port, followed by Krishnapatnam, Gangavaram, Kandla and Paradip port.
Among the various coal handling ports, only Paradip had witnessed a fall in coal intake on the monthly basis, while no shipments were recorded in Hazira port during the first 20 days of Jun’18.
Coal Export from RBCT to its other major customers-Pakistan and South Korea had also gone up during the period. Pakistan and South Korea both have imported nearly 0.3 MnT coal during the first 20 days period.
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