- Exports from South Africa recover by 34% m-o-m
- May imports may increase to fulfill summer demand
Indian thermal coal imports in April, 2024 recorded a rise of about 6% m-o-m to 16.4 mnt as against 15.5 mnt in March, 2024. The imports have picked up majorly due to following reasons:
- Imported coal-based power plants to operate at full capacity till mid Oct’24
The government has extended the operation of power plants fuelled by imported coal until mid-October due to rising electricity demand, expecting a peak of 260 GW during summer. This extension, under Section 11 of the Electricity Act, aims to meet the increased power needs, surpassing last year’s record. Despite the high cost of imported coal, efforts are focused on optimising operations to manage the surge in demand, including exploring surplus power from captive generating stations. The Indian Meteorological Department (IMD) predicts above-average summer temperatures nationwide, except for certain regions.
- RBCT, SA rail coal flows recover post-derailment
Rail coal transportation to Richards Bay Coal Terminal (RBCT), South Africa (SA’s) prime export hub, rebounded strongly after a recent derailment. Transnet shipped 946,000 tonnes (t) to RBCT towards mid April, up from the previous week’s 463,000 t due to the incident. The second derailment since 2024 underscored infrastructure vulnerabilities, with a previous collision on 14 January disrupting operations.
Coal shipments via the North Corridor peaked at 1.18 million tonnes (mnt) by 25 March but plummeted to 460,000 t post-accident. However, post-accident, Indian sponge sector resumed purchases.
Country-wise imports
India’s thermal coal imports from Indonesia stood at 10.2 mnt in April 2024 as against 10.02 mnt in March 2024, edged up m-o-m. The imports were majorly stable as Indonesian miners were on Ramadan holidays, leading to a temporary slowdown in production. Operations resumed as miners returned. But, some Indonesian producers were attempting to liquidate cargoes, particularly those with a mid-level calorific value, at prices favourable to buyers because they anticipated price drop.
Shipments from South Africa increased by 34% m-o-m to 2.6 mnt in April 2024 as against 1.9 mnt in March 2024. Shipments from the US rose by 8% m-o-m to 1.4 mnt in April 2024 as against 1.3 mnt in March 2024. Also, shipments from Australia increased by 15% m-o-m to 0.7 mnt in April 2024.
Company- wise imports
Adani Enterprises recorded the highest imports at 2.9 mnt, up by 4% m-o-m as against 2.8 mnt in March 2024. Adani Power imports rose by 22% to 1.7 mnt followed by Tata Power at 1 mnt. Agrawal Coal recorded a rise of 38% m-o-m to 0.9 mnt in imports during the month under review.
Port-wise imports
Mundra Port imported the highest volumes of 3.2 mnt, followed by Krishnapatnam at 1.9 mnt and Kandla Port at 1.3 mnt, respectively. Moreover, total coal volumes at Vizag surged by 60% to 0.9 mnt.
Outlook:
Rising summer demand in India, coupled with the government mandate to operate power plants at full capacity until September 2024, is expected to boost Indian thermal coal imports. The country’s efforts to decrease reliance on imports and enhance domestic resource utilisation remain a priority. The Indian government aims to produce 170 mnt of coal from captive and commercial coal mines in April 2024-March 2025 (FY’25). M. Nagaraju, additional secretary of coal, reviewed the coal output target in a meeting participated by representatives from 74 coal mines, expressing confidence in achieving the set target.
Adani Gangavaram Port (AGPL) had declared force majeure due to employee agitation, disrupting cargo handling and associated operations starting 10 April 2024. This could affect the port stocks and import at the port.
Russia decided to remove export tariff on thermal coal and anthracite from 1 May to 31 August 2024, aiming to support the country’s coal industry. The removal of exports may enable Indian coal imports to increase from Russia replacing other thermal coal origin material on cost effectiveness.
