Imports picked up from Indonesia
Shipments from Australia drop amid maintenance shutdown at ports
India’s thermal coal imports in February 2024 rose by 2% m-o-m to 14.84 million tonnes (mnt), as per CoalMint data. Imports rose by 30% to 14.84 mnt in February 2024 compared to 11.40 mnt in February 2023.
Imports picked up from Indonesia amid RKAB approval
Imports from Indonesia rose as the Lunar New Year holidays in China halted purchases, diverting material to India. The disruption in Chinese buying prompted a shift in trade patterns, benefiting Indian markets. Furthermore, increased imports were facilitated by miners obtaining RKAB approval, contributing to a rise in supply. Additionally, India’s growing demand for coal, coupled with favourable pricing, further fueled the rise in import volumes.
Power Ministry extends Imported coal blending timeline To June 2024
India’s Ministry of Power extended the deadline for blending imported coal for domestic thermal power plants to June from March due to an anticipated increase in peak power demand to 250 gigawatts during April-June. This decision was prompted by logistical constraints affecting domestic coal supplies, urging power companies to secure imported coal contracts and maintain adequate reserves to meet summer demand.
Domestic production
State-run miner Coal India Ltd (CIL) continued its robust performance in terms of production in February 2024. CIL’s production rose by 9% y-o-y to 74.8 mnt in February 2024 as against 68.8 mnt in February 2023. During the month, coal dispatches posted rise of 12% y-o-y to 65.3 mnt compared to 58.3 mnt in February 2023. This surge in domestic supply helped stabilize import volumes.
Country-wise imports
India’s thermal coal imports from Indonesia stood at 9.40 mnt in February 2024 as against 8.45 mnt in January 2024,rose by 11% m-o-m. Imports from Indonesia rose as the Lunar New Year holidays in China halted purchases, diverting material to India. Disruption in Chinese buying altered trade patterns, favoring Indian markets. Enhanced imports were aided by miners obtaining RKAB approval, bolstering supply.
Shipments from South Africa dropped by 19% m-o-m to 2.13 mnt in February 2024 as against 2.65 mnt in January 2024. Some coastal power plants, as well as steel and cement sectors, were directing their inquiries to South African coal, driven by its attractive prices and smoother supply situation. Despite sluggish overall demand by India for thermal coal bookings increased in the latter half of the month.
Despite the sluggish demand, transactions are ongoing. However, buyers, who traditionally relied on seaborne supplies, are now indicating a preference for domestic coal. According to some market participants, this noticeable shift towards domestic supplies suggests that while there is an improvement in demand, buyers are increasingly favouring domestic coal over imported options.
Shipments from Australia dropped 15% m-o-m to 0.90 mnt in February 2024 as against 1.07 mnt in January 2024. Imports dropped amid supply constraints in Australia due to maintenance shutdown at ports. Australia’s Hay Point Port is scheduled for maintenance shutdown from 29 January 2024- 15 February 2024. During this maintenance period congestion at other prominent ports in Australia may be seen, impacting coal exports for the entirety of January.
In CY’23, Hay Point’s total coal exports amounted to 37 mnt, contributing to Australia’s overall coal exports of 347.32 mnt last year. Moreover, Australia’s Hay Point Port Berth 3 is presently undergoing maintenance shutdown from 25 Febuary 2024- 5 March 24, while DBCT Port Berth 2 is scheduled for maintenance from 21 February 2024 -13 March 2024.
Moreover, shipments from he US dropped by 9% m-o-m to 0.78 mnt in February 2024 compared to 8.45 mnt in January 2024. However, shipments from Mozambique rose by 11% m-o-m to 0.85 mnt in February 2024. Imports from Russia remained stable m-o-m to 0.47 mnt in February 2024.
Company-wise imports
Adani Enterprises recorded the highest imports at 2.14 mnt, dropped by 18% m-o-m as against 2.61 mnt in January 2024. Adani power rose by 16% in monthly import volumes at 1.98 mnt followed by Agarwal coal at 1.12 mnt. Mohit Minerals recorded a significant surge in imports during the month under review.
Port-wise imports
Mundra port imported the highest volumes of 3.02 mnt, followed by Krishnapatnam at 1.56 mnt. Mangalore and Dhamra ports received cargoes of 0.94 mnt and 0.74 mnt, respectively. Moreover, total coal volumes at Hazira and Navlakhi rose by 59% and 37% respectively.
Russia reinstates linked coal export duties from March 2024
Russian government re-introduced flexible coal export duties tied to the rouble exchange rate from 1 Mar’24. The duties will be valid until 28 February 2025 and will vary from 4% to 7%. Duty exemption applies if the rate falls below 80 rouble per USD. Similar duties, imposed on October 2023, were abolished in December 2023.
Outlook
Thermal coal imports are anticipated to see a rise in the near term driven by increased demand for South African coal by sponge producers. However, robust domestic supply in India meets local demand, potentially squeezing thermal coal imports. Moreover, Russian imports may face pressure due to reinstated export duties.