India’s coking coal imports (excluding PCI) in Feb’22 stood at 4.46 million tonnes (mnt), up 19% m-o-m compared to 3.74 mnt in Jan’22, indicating that Indian buyers booked coking coal despite high prices in order to replenish their stocks. However, on a y-o-y basis, imports fell by 2.6%, according to CoalMint’s data.
Russian coking coal imports saw a surge in Feb’22.
Out of all the coal origins, imports from Russia rose dramatically by more than 200% m-o-m in Feb’22 to 0.28 mnt. Tata Steel brought in the highest quantity of coking coal from Russia, followed by JSW Steel.
India and Russia signed a memorandum of understanding in October last year for a strategic partnership in mining and steel, with a special focus on coking coal. Since 75% of the coking coal is imported only from Australia, this memorandum aimed to diversify India’s coking coal sources.
Imports from Australia and US also rise, despite high prices
India’s coking coal imports from its key destinations, Australia and the US, rose by 6% and 47% to 3.23 mnt and 0.44 mnt respectively.
Australia has been facing more-than-expected rainfall this year due to the La Nina event that has hampered supplies from the country and pushed up its prices by 58% in the last six months even before the onset of the Ukraine-Russia conflict. This supply disruption from Australia supported the heightened demand for US coking coal and its prices.
With no option left, Indian steel mills were compelled to buy Australian and US coking coal at higher prices as the stock bought by them in October-November had been exhausted. This was also coupled with sound domestic demand for Indian steel as January-June (before monsoon) is the peak season especially since construction activities pick up in this period in India.
PCI imports
However, India’s PCI coal imports fell by 14% in Feb’22.
India’s PCI coal imports recorded a decline of 14% in Feb’22, standing at 0.80 mnt. The PCI imports mainly come from Australia and Russia. While the imports from Australia rose by 13% m-o-m to 0.58 mnt, imports from Russia fell dramatically by 48% to 0.22 mnt.
Outlook
Australian and US coking coal prices touched an all-time high in Mar’22 amidst the Russia-Ukraine war. This has badly impacted the buying appetite of Indian coal users. With sanctions on Russia, Indian buyers are looking to buy more of US and Australian coal. While the already-booked coking coal vessels would come to India without any disruptions, new import orders from all countries would be adversely impacted amid high prices. Thus, overall coking coal and PCI imports would be adversely impacted in March and even in April.
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