Amidst escalated thermal coal prices, Indian cement and power plants located in the coastal belt and designed to run on imported fuel have been procuring the same from the U.S. given its low per calorific value (CV) cost.
The U.S. 6,900 NAR thermal coal’s CNF India prices are currently assessed at $172-173/tonne (t). On the other hand, the Australian 5,500 NAR is at $136-137/t (for Panamax vessel), and the South African prices are at $130-132/t (for Capesize).
However, CoalMint’s analysis shows that on per CV basis, U.S. coal is cheaper by 29% compared to the Australian variety and by 21% compared to South African, after adding all duties and taxes. This analysis is made based on the heat-value of coal required for the production of one tonne of cement.
India imported 8.9 million tonnes (mn t) of thermal coal from the U.S. during Jan-Jul’21, (up 81% y-o-y) whereas 0.25 mn t is set to arrive in the next one week by 7 Sept’21.
Mahalaxmi Continental and Ultratech Cement are bringing in 0.10 mn t of U.S. thermal coal vessels to Kandla and Gangavaram ports respectively, while JSW Energy will bring in 0.15 mn t of Mozambique coal to Jaigarh Port.
Indonesian coal vessels remain the highest
A total volume of 2.75 mn t of thermal coal is scheduled to arrive at various ports in India by 7 Sep’21, as per CoalMint’s vessel line-up data.
Highest number of vessels are coming in from Indonesia, carrying 1.21 mn t of coal, followed by South Africa with 0.48 mn t. Imports from Australia are at a mere 0.08 mn t due to a sharp rise in its thermal coal prices.
For Indonesian coal, Agarwal Coal is set to bring in the highest volume at 0.28 mn t at various ports, while IL&FS Tamilnadu Power will bring in 0.14 mn t at Karaikal Port. Adani Enterprise has booked 0.09 mn t of Indonesian coal.
As for South African coal, Adani Enterprise has booked the highest volume of 0.32 mn t, followed by Tata Steel at 0.16 mn t.
| Country | Quantity in mn t |
| Indonesia | 1.21 |
| South Africa | 0.48 |
| Mozambique | 0.31 |
| U.S. | 0.25 |
| Australia | 0.08 |
Mundra Port to receive highest quantity of coal
Vessel arrivals at western ports remain the highest at Mundra Port. It will receive the highest volume of 0.40 mn t of thermal coal from Mozambique, South Africa (0.16 mn t each), and Indonesia (0.08 mn t).
Kandla Port is set to receive the second-highest volume, at 0.35 mn t, of thermal coal, while Navlakhi Port will receive 0.31 mn t of Indonesian coal. Dahej Port will receive 0.17 mn t of Indonesian coal and 0.08 mn t of Australian coal.
Thermal coal vessel arrival at southern ports continues to remain the lowest as Krishnapatnam Port is set to receive 0.08 mn t of thermal coal from Indonesia, while Tuticorin will receive 0.03 mn t of Indonesian coal till 7 Sept’21. Mangalore Port is set to receive 0.06 mn t of thermal coal from Indonesia.
Lower number of vessel arrivals and rapidly depleting coal stocks at southern ports continued to keep imported portside coal prices elevated in the last three weeks.
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