Supply constraints across major coal exporting countries are likely to keep portside prices elevated as a total of 2.3 mnt of thermal coal shipments are set to arrive at Indian ports between 25 Jan-5 Feb’22 against the 15-days average of 4.5-5 mnt under normal circumstances, CoalMint vessel line-up data reveals.
Despite the Indonesian government recently lifting the coal export ban, uncertainty over deliveries have already lifted Indonesian portside prices over 15% m-o-m to INR 8,800/t for 4200 GAR at Kandla Port, CoalMint assessment showed. Prices exclude cess and GST.
A total of 0.8 mnt of Indonesian thermal coal is slated to arrive at Indian ports during 25 Jan-5 Feb’22. The quantity is much lesser as against the normal average imports of Indian end-users from Indonesia every month.
The expectation of prices rising further in the upcoming weeks and the impact of the supply disruption spilling over to next month compelled end-users to book quantities in advance, market participants informed.
In the above-mentioned period, Adani Enterprise is set to bring 0.17 mnt of thermal coal from Indonesia at Kandla and Navlakhi ports, and Tata Power to bring 0.12 mnt at Mumbai Port.
Hindustan Zinc, Taranjot Resources, and Surya Dev are among the other buyers of Indonesian coal.
South African prices elevated
South African RB2 (5500 NAR) prices at Gangavaram Port have also risen sharply by 17% m-o-m to INR 13,900/t amidst supply constraints there. A total of 0.63 mnt of thermal coal is set to arrive from South Africa till 5 Feb’22 as coal stock at RBCT Port is at its multi-year low of 1.9 mnt.
Supply disruptions surrounding maintenance works at Transnet Freight Rail have contributed to the fall in shipments from South Africa.
Adani Enterprise and SM Nirayat are set to bring the highest quantity of South African coal at 0.16 mnt each at Gangavaram and Kolkata ports, respectively.
Shipments from Australia are also seen lower at 0.27 mnt during the same period as portside prices of 5500 NAR have risen 15% m-o-m to INR 13,200/t.
Vessel arrival from USA also remained lower at 0.24 mnt, with portside prices rising by 14% m-o-m to INR 17,800/t at Kandla Port.
Limited cargo raises supply concerns
Given that Jan-Mar is typically seen as the peak season for construction activity, the limited vessel arrival may continue to affect manufacturers.
India’s reliance on imported coal continues to remain higher as NTPC, one of India’s largest thermal power producers, has floated tenders to procure over 14 mnt as producers expect a potential shortage of domestic coal in the summer.
With the steady growth in power demand this year, the government seeks to ensure adequate stock to avoid fresh round of coal crunch similar to that seen in the last year.
Leave a Reply