India’s thermal coal imports from Russia are set to decline for the second-straight month in October to around 0.73 million tonnes (mnt), down by 51% m-o-m, according to provisional numbers compiled by CoalMint.
The decline can be attributed to the fact that major end-users like sponge iron and cement manufacturers and brick kilns have amassed huge inventories of the fuel. It may be recalled these segments had increased their usage of Russian coal for its price viability compared to other origins.
An increase in Russian coal prices last month amid supply constraints also affected buying appetite. India-delivered high-CV Russian 6000 NAR grade prices rose to $200/t CIF basis, as against $185-190/t in July-August, 2022.
Russian thermal coal shipments coming to India
The top key buyers of Russian thermal coal in October are ArcelorMittal Nippon Steel, Ultratech Cement, and Rashmi Group.
The overall Russian coal import volumes of these companies for this month are low compared to the last few months as expectations of elevated coal prices by the year-end had compelled them to book major vessels earlier on.
Large-scale Indian DRI producers were heard to have sufficient stockpiles of Russian coal for the next two-three months and preferred to explore stock and sale options or bulk quantity to the tune of 20,000-30,000 t.
Rising domestic coal output and dispatches also increased the availability of Indian coal to the non-power sector, further curtailing import bookings this month.
During January-September 2022, India’s coal output rose by 14% y-o-y to 637 mnt, while dispatches rose by 11% y-o-y to 641 mnt in this period.
Coking coal volumes seen rising
Many Indian steel mills are avoiding Russian coking coal as its specifications are not that suitable for Indian furnaces. However, about 0.34 mnt of coking coal is seen coming to India in October against 0.12 mnt in September.
JSW Steel is bringing in the highest volume of 93,525 t followed by Bhushan Power at 57,556 t. Jindal Steel and Power Ltd, and Jayaswal Neco are set to bring in 31,152 t and 20,000 t, respectively. These companies are bringing high-CV, good quality coking coal to replace costlier thermal coal especially from South Africa and Australia, informed participants.
Short-term outlook
India’s coal imports from Russia are likely to be in a tight range in the coming months amid sluggish domestic demand from the sponge iron sector. Cement players are preferring pet coke and the power sector is using more of domestic and Indonesian coals.
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