Indian non-coking coal imports have moved up in Aug’18, thereby ending a 2-month declining streak which had started from Jun’18.
According to the data compiled by CoalMint Research, the country’s coal imports have increased 11% M-o-M to 15.70 MnT in Aug’18 compared with 14.15 MnT in Jul’18, which were also 57% higher on the year from 9.97 MnT in Aug’17.
The surge in imports was boosted by the drastic fall in Indonesian coal prices which have been declining from Jun’18. Indonesian 4200 GAR coal, in fact, has dropped 22% from USD 49/MT in Jun’18 to USD 38/MT in Aug’18, which had triggered a spurt in demand among the Indian buyers.
Domestic bottlenecks: The continuous rise in power demand compels CIL to increase its coal supply for the power sector, thereby arising strong demand for imported coal from the non-power sector.
CIL have been accused of providing special treatment for coal supplies to the thermal power plants having power purchase agreements with distribution companies (Discoms), which are prioritized to avoid disruptions in electricity supplies to consumers and households.
Next in line for coal supplies are the Independent power producers (IPPs) which sell their electricity in open market, thereby helping the Discoms to balance the mismatch in demand and supply.
As far as the non-power sector is concerned, they are the last in line among the recipient of coal. Data from Coal Ministry indicates that the coal allocated in the past months’ e-auctions of CIL had remain subdued, which might also have diverted non-power sector attention towards foreign market to meet their coal demand.
Rising Y-o-Y Imports: The coal import pattern seen this year has certainly erased the tag of India being a price-sensitive coal buyer. The country’s 23% Y-o-Y rise in non-coking coal imports during the first 8 months of CY18 to 113.98 MnT against 92.37 MnT, have come at a time when global coal prices are extremely high.
Newcastle coal index, regarded as a benchmark for non-coking coal, was assessed at USD 114.55 as on 7 Sep’18, isn’t far off from the 6 and a half year high of USD 120/MT hit in Jul’18, which also had an affect on Indonesian and South African coal prices.
However, India has registered growth in coal imports both from its major coal markets-Indonesia and South Africa during the 8-month period. Imports from Indonesia have increased 7% Y-o-Y to 66.1 MnT, while coal from South Africa grew 21% Y-o-Y to 25.62 MnT in Jan’18-Aug’18 period.
India’s coal import from the US in the 8-month period has reached 8.65 MnT, which has already surpassed its previous year total of 5.88 MnT attained in CY17.
Major Coal Exporters in Aug’18:
Indonesian coal export to India attained a 17-month high total of 9.6 MnT in Aug’18, rising 32% M-o-M from 7.27 MnT in Jul’18.
Coal supply from South Africa increased 8% M-o-M to 3.70 MnT in Aug’18, which was also 57% higher on the year from 2.36 MnT in Aug’17.
Australia overtook the US to become the third-largest coal supplier in Aug’18. Australian coal export to India increased 26% M-o-M to 1.12 MnT, while US coal exports dropped 55% M-o-M to 0.65 MnT in Aug’18.
Source: CoalMint Research | Quantity in MnT
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