Indian coal imports from Russia increase 10% m-o-m in July

India has imported 2.03 million tonnes (mnt) of coal from Russia in July 2022, up 10% m-o-m from 1.85 mnt in June 2022, as per vessel line-up data compiled by CoalMint.

Following the sanctions imposed by European countries, Russia has been struggling to sell its coal and is offering hefty discounts. This comes as a boon for the Indian buyers as they increase procurement of Russian coal at a time when there is shortage of domestic coal in the country.

Among the variety of coal arriving from Russia in July, thermal coal had the highest share at 1.4 mnt, followed by coking coal (0.29 mnt) and PCI (0.13 mnt). Notably, India’s July thermal coal imports from Russia were the highest monthly volumes so far this year.

Thermal coal imports up 55% m-o-m

Thermal coal imports from Russia rose sharply by 55% m-o-m against June 2022. On y-o-y basis, imports marked an exponential growth of around 500% as compared to 0.24 mnt in July 2021.

Power and cement industries accounted for the majority of imports, as Russian coal’s high GCV and lower sulphur content is best suited for them.

UltraTech cement was the major importer of thermal coal at 0.17 mnt, followed by JSW Steel.

Coking coal imports up by 75% m-o-m

Coking coal imports stood at 0.29 mnt in July 2022, up by 75% m-o-m. JSW Steel was the top buyer of Russian coking coal, followed by Visa Steel and Vedanta.

In view of the domestic scarcity of premium quality coking coal, India relies majorly on Australia and other exporting nations such as Canada and United States, to meet its coking coal demand.

However, due to India’s physical proximity with Russia compared to the aforementioned countries, Indian steelmakers have found a new alternative in Russian coking coal—as it yields lower-per-tonne steel production cost compared to coal from other origins.

Outlook

India’s Imported coal demand is likely to come down amid bearish sentiments in the steel and cement industries during the monsoon. However, on a long-run, the share of Russian shipments in overall coal imports would continue to grow.