Total coal traffic (coking and non-coking) handled at Indian ports stood at 319.16 million tonnes (mnt) in CY22, an increase of 20% from 266.34 mnt y-o-y, CoalMint data shows.
Thermal coal traffic handled at ports picked up by 26% to 248.5 mnt in CY22 against 197.64 in CY21. Also, coking coal traffic increased slightly to 70.6 mnt for the year against 68.7 mn t in CY21.
Qty in mnt
Port traffic refers to shipments via imports, exports, and coastal movement between different ports in India.
Why has Indian port traffic increased?
Rising demand from power sector: Coal traffic for thermal coal improved amid rising demand especially from the power sector. Increasing power demand has compelled the government to reconsider its stance towards imported coal procurement. In a new directive issued in January 2023, the Ministry of Power (MoP) has instructed power plants to resort to imports by procuring 6% (by weight) of their needs for blending with domestic coal till September 2023, failing which curtailment in domestic supply has been proposed.
A similar order was issued back in May 2022 when coal imports were mandated against a blending ratio of up to 10% to bolster inventories at power stations. The order was eased out towards August-September 2022.
Increasing demand from non-power sector: The non-power sector faced a hard time after Coal India Ltd. (CIL) curtailed allocations meant for them to augment supplies for the power sector. The introduction of a single-window auction from March 2022 onwards resulted in a spurt in bid prices. This was supported by competitive bidding seen from the wider set of customers participating in these auctions who were aggressively procuring the minimal quantity on offer.
During January-December last year sales via auctions garnered an average premium of 265% over the average notified price assessed for the allocated coal volume as against 57% recorded in January-December, 2021.
Increase in domestic production: India’s total coal production recorded a significant rise to 861.9 mnt in CY22 as against 766.39 mnt in CY21. State-run miner CIL has attained new highs in terms of coal production. The company breached the 400-million tonnes (mnt) production mark in the quickest time since its inception. The milestone was attained on 24 November of the ongoing fiscal, 31 days ahead compared to 25 December of the previous year.
India’s thermal coal imports in CY22 increased by 16% y-o-y to 161.8 mnt, according to Coalmint data amid increased imports from Russia and Indonesia. Indonesian thermal coal prices witnessed a downturn in April after touching their peak in March (due to the Russia-Ukraine war) in the absence of Chinese buying interest due to COVID-19 restrictions resulting in Indian buyers importing more of Indonesian coal. Also, India’s imports of Russian coal rose more than three-fold to 8.43 mnt in CY22.
Key ports handling thermal coal
Qty in mnt
As per CoalMint data, thermal coal traffic at Paradip Port was recorded at 45.79 mnt in CY22, up 65% y-o-y against 27.7 mnt in CY21. Krishnapatnam Port handled 30.04 mnt in CY22 and Ennore 21.01 mnt. Port traffic at Mundra decreased by 6% to 18.8 mnt.
Key ports handling Coking coal
Qty in mnt
Paradip port recorded highest vessels for the year at 12.46 mnt, followed by Dhamra at 11.91 mnt. Haldia port recorded a 26% rise in vessels for the year at 11.56 mnt.
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