Total coal traffic (coking and non coking combined) handled at Indian ports in April 2022 was 26 million tonnes (mnt), down by 14% m-o-m.
This fall was predominantly because of a drop in non-coking coal shipments by 18% m-o-m to 20 mnt which constitute 76% of the total coal traffic. Interestingly, coking coal traffic was up by 4% m-o-m to 6.1 mnt in April.
Quantity in mn t
Non-coking coal traffic falls amid higher prices
The reason for a slump in non coking coal traffic at Indian ports was elevated prices because of geopolitical tensions between Russia and Ukraine and subsequent sanctions on the former. This created supply crunch from Russia, resulting in increased demand for other-origin coal, thus pushing up its prices.
An analysis of prices prevailing before the war and at present shows a sharp rise m-o-m. While Australian 5500 kcal/kg NAR and South African RB2 (5500 kcal/kg NAR) coal prices rose by 40% and 38% m-o-m respectively in April, Indonesian prices rose by 31%.
Coking coal traffic up as prices fall from all-time high
In contrast to non-coking coal, coking coal traffic handled at Indian ports was up in April because of the fall in prices. Its prices dropped $116/t m-o-m to $474/t in April after touching a record high level of $670/t FOB in March. In addition, as supply worries mainly caused by floods and heavy rains in Australia eased in April, Indian buyers came back to restock before the monsoon.
Port-wise coal traffic
The highest decline of 25% in vessels arrival was observed at Vizag and Gangavaram ports (owned by Adani Enterprise) whereas the highest rise of 52% was seen at Jaigarh Port, which is owned by JSW Steel.
Port-wise non-coking coal traffic arrival
Quantity in mn t
Port-wise coking coal traffic
Quantity in mn t
Outlook
Non-coking coal supply crunch is likely to incentivise imports in the upcoming months. However, elevated prices may limit any major rise. In case of coking coal, shipments may drop in May as buyers have sufficient stock.
Leave a Reply