Continuing the declining trend of last month, India’s thermal coal imports have dipped 5.8% m-o-m at 14.8 mn t for January, vessel line-up data with CoalMint revealed.
Imports from Indonesia fell by 5% m-o-m basis although it continued to be the top exporter of thermal coal to India at 8.43 mn t. The highest drop of 21% was recorded in imports from South Africa which stood at 0.93 mn t.
Imports from Australia, U.S. and Mozambique recorded a remarkable m-o-m increase of 13%, 27% and 300% in January and stood at 2.21 mn t, 0.93 mn t and 0.22 mn t respectively.
Looking at sector-wise thermal coal imports in January, except for power, all the other sectors, including traders, sponge iron and cement have registered a m-o-m drop of 6%, 15% and 35% respectively. The power sector’s imports have moved up by 7.4% m-o-m in Jan’21 and stood at 5.43 mn t.
Maintenance extension at RBCT port
South Africa’s RBCT port had a maintenance scheduled for eight days starting 8 January which was later extended for another week resulting in port activities shutting down for 15 days. This coupled with sufficient stock of South African coal at Indian ports and sluggish demand from sponge sector made importers slash their imports from the country for Jan’21. Adani Enterprise remained the top importer of South African coal at 0.46 mn t followed by SM Niryat at 0.40 mn t.
What drove up coal imports from other countries?
While there is increased presence of Australian coal in Indian market since last year amid Chinese ban on Australian coal, imports from U.S. and Mozambique saw a significant surge in January as coal from these countries had become quite viable for few Indian cement and power producers (being cheaper in terms of per CV cost basis). UltraTech Cement emerged the top buyer of U.S. thermal coal in January and JSW energy was the top buyer of coal from Mozambique.
India’s power consumption increased to a three-month high of nearly 4% m-o-m and 6% y-o-y at 111.4 billion units (BU) in January 2021, showing spurt in economic activities, according to official data. This supports the increase in thermal coal imports from power sector during the month.
Outlook
Thermal coal import from South Africa is likely to remain subdued in February amid the Force Majeure announced at RBCT due to bad weather conditions and also due to retreated demand from Indian sponge iron manufacturers. Coal imports from cement sector are likely to remain at similar levels in Feb. ‘21 amid slowed procurement from the real estate and construction sectors. While in case of power sector, thermal coal imports may observe a rise amid price correction of Indonesian coal ahead of Chinese Lunar New Year Holidays.
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