Indian thermal coal imports from USA surged by 182% to 3.10 million metric tons (MMT) in Q3 of 2018, against 1.07 MMT in the corresponding period of 2017, as per the latest data maintained by American Fuels and Natural Resources FZCO (ANR), one of the largest suppliers of US coal into the Indian market*.
Total thermal coal import from USA in the first nine months of 2018 stood at 10.08 MMT, up by 176% Y-o-Y, against 3.64 MMT in the same period of 2017.
In 2017, India has imported 6.30 MMT of thermal coal from USA against 3.46 MMT in 2016.
| 2017 | 2018 | ||||||||||
| NAPP | ILB | Total | NAPP | ILB | PRB | Total | |||||
| WCI | ECI | WCI | ECI | WCI | ECI | WCI | ECI | ||||
| Jan | 124,529 | 124,529 | 723,338 | 204,887 | 160,019 | 1,088,244 | |||||
| Feb | 431,280 | 431,280 | 253,047 | 668,380 | 144,247 | 1,065,674 | |||||
| Mar | 235,967 | 235,967 | 486,939 | 532,511 | 69,975 | 1,089,425 | |||||
| Apr | 554,498 | 554,498 | 866,929 | 249,437 | 119,561 | 1,235,927 | |||||
| May | 794,122 | 175,944 | 49,000 | 1,019,066 | 631,712 | 380,102 | 145,450 | 142,230 | 1,299,494 | ||
| Jun | 129,575 | 82,057 | 211,632 | 500,842 | 467,647 | 72,395 | 92,605 | 162,224 | 1,295,713 | ||
| Jul | 77,001 | 197,500 | 274,501 | 253,031 | 645,262 | 560,021 | 55,010 | 1,513,324 | |||
| Aug | 124,085 | 199,266 | 323,351 | 375,050 | 122,875 | 215,499 | 713,424 | ||||
| Sep | 100,900 | 324,275 | 44,000 | 469,175 | 464,327 | 119,998 | 199,591 | 783,916 | |||
| Oct | 591,163 | 242,000 | 833,163 | ||||||||
| Nov | 496,660 | 246,525 | 61,911 | 805,096 | |||||||
| Dec | 695,661 | 240,136 | 82,469 | 1,018,266 | |||||||
| Total | 4,355,441 | 1,707,703 | 237,380 | 6,300,524 | 4,555,215 | 2,190,208 | 2,393,847 | 783,647 | 162,224 | 10,085,141 | |
The import volume of US coal increased after petroleum coke usage was banned in the NCR region in Sep’17 and thermal coal prices moved up across the board in H1 of 2018.
Over the past many months, US thermal coal, in particular, has become the most viable fuel option in terms of per Kcal cost. Apart from its competitive pricing, US coal is low in ash and moisture (7-8%), thus offering high calorific value (CV).
According to Linus Lobo, VP – Marketing at ANR, US coal is the cheapest among high CV coals delivered to India.
Despite US cost becoming costlier from Aug’18, once it travels inland it becomes competitive again due to higher logistic cost.
India has high logistics cost and with rising diesel prices, it makes sense to transport more calories on every truck laden with coal, thereby requiring less trucks to move one’s fuel.
In this context, Vasudev Pamnani, a senior trader at ANR, opines that, “There will be good demand of high CV coal due to higher demand in power and cement industry, ban on pet coke, inland logistic cost.” He further adds that “India might see 3-4 MMT of coal coming from USA in Q4 2018”.
Coal India coal stocks at pit head are at 5-year lows. The coal stock at CEA monitored power plants will cater to less than 10 days of burn and we have now entered the busy season with respect to coal burn by power sector as well as industry.
Indian Railways has been asked by government to allocate 90% of its rakes for coal movement to state owned power plants, hence, there will be less trains available for private sector industry.
More coal will be transported by trucks, in a high diesel price environment. Truck freight rates are also expected to go up.
In this context, it would make sense to move energy of higher calories per kg than lower calories per kg., therefore the bullishness on imports for US coal.
*ANR and its associated companies have handled above 2 MMT US coal in current year.
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