Amid the ongoing coal supply crunch in India, thermal coal imports witnessed a sharp rise of 40% m-o-m to 20.9 mnt in June 2022, the highest so far this year, CoalMint’s vessel line-up data reveals.
Shipments from major coal-producing countries rose sharply with Indonesia topping the list, followed by South Africa and Australia.
Vessel arrivals from Russia also increased in the Indian market, owing to the competitive prices.
Trade dynamics
*Qty in mnt
Indonesian coal prices were stable over the last three months thanks to weak Chinese demand, coupled with domestic coal shortage. Thus, Indian power utilities continued to make large-scale bookings from this country.
Shipments from South Africa also rose sharply by 32% as elevated prices and not very good quality of domestic coal compelled the sponge iron industry to switch back to imported material. This time, more of low-CV RB3 (4800 NAR) were imported as against mid-CV RB2 (5500 NAR) as the former was available comparatively cheaper.
Imports for Australia rose by a whopping 166% in June with power utilities and cement companies being the major buyers. This was also because Australian thermal coal prices were competitive against pet coke in mid-May when the bookings were made.
Shipments from the US and Mozambique, on the other hand, were on the lower side due to their increase demand and higher realizations in other economies.
Russian imports surge
Imports from Russia recorded exponential growth of over 180% last month on rising demand for the same from the cement and power industries.
Discounts being offered on Russian coal were the major reasons behind the increased imports.
Sector-wise imports
*Qty in mnt
Sponge iron: Thermal coal imports by the sponge iron sector recorded a sharp rise of 24% m-o-m to 1.9 mnt in June. This came amid limited domestic coal supply to the non-power sector which came down by 13% m-o-m.
Power: The onset of rainfall across several parts of the country last month resulted in a drop of 3% m-o-m in coal-fired power generation. This, coupled with CIL’s coal dispatches to the power sector, resulted in 4% decline in thermal coal imports by the utilities.
Cement: Thermal coal imports by the cement sector rose sharply by 59% last month as they were keen to build up inventory before the monsoons entered in full swing in July.
Outlook
As per CoalMint’s analysis, the ongoing coal supply crunch in the country, especially being faced by the non-power sector, is likely to increase imports next month. Shipments from Russia are likely to go up further, being relatively cheaper compared to other origins.
To know more about the changing trde dynamics of India’s coal imports for the second half of the year join us at India Coal Outlook Conference. CoalMint will be hosting the India Coal Outlook Conference on 3-4 August 2022 at The Lalit, New Delhi, to discuss the key issues pertaining to domestic coal production and supply, the government’s objective of controlling imports and domestic supply gap affecting many industries, the need to increase the purchasing power of Indian steel companies in the volatile global coking coal market as well as issues related to decarbonization of the coal value chain.
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