India’s coking coal imports in August 2022 increased by 13% m-o-m to 4.66 million tonnes (mnt) and by 14% compared with August last year. However, during January-August this year imports have fallen by 3% to 36.99 mnt as against the corresponding period of 2021.
Quantity in mnt
India’s coking coal imports from the US have increased by 90% m-o-m to 990,000 t in August, touching a five-year high.
Since China banned Australian coal imports two years back, the US emerged as the country’s top coal supplier. However, new COVID-19 infections, the worst heatwaves in decades and an embattled property sector weighed on Beijing’s steel production and its coking coal requirement in the past few months.
This made US coal prices quite competitive, nudging Indian mills to diversify and book material from the country. The turnaround time for US coal arrival is around 60 days which means that the shipments that have arrived in India in August were booked in June.
In addition, reduced Australian supplies due to floods/rains forced Indian steel mills to opt for sourcing from alternative origins. India’s imports from its key supplier, Australia, dropped 9% m-o-m in August at 2.67 mnt. The turnaround time for Australian coal vessel arrival to India is about 40 days.
Australia’s share in India’s coking coal imports during January-August 2022 stands at 70% as against 80% last year, whereas the US’s share has increased from 5% in 2021 to 13% in the current year.
India’s imports of Russian coking coal dropped 17% in August as Indian mills are shying away amid fear of western sanctions.
On the demand side, India’s crude steel output is estimated to be around 10.3 mnt, similar to last month (10 mnt), as per CoalMint estimates.
SAIL remains top importer
Quantity in mnt
During January-August, SAIL’s imports of coking coal went up 13% y-o-y. Imports by Tata Steel recorded a drop of 4% during the period.
Port-wise imports
Quantity in mnt
Coking coal vessel arrivals at Dhamra port during January-August rose 16% y-o-y whereas at Paradip arrivals fell by 15%.
Outlook
India’s coking coal demand is expected to improve in the coming months on expectation of demand surge post monsoons. However, the export duty on steel will restrict any significant rise in coking coal requirements. While there are talks of the possibility of the duty being removed in the near future, any confirmation is still awaited.
Imports from the US are expected to be in a similar range or may even increase, while shipments from Australia may drop if supplies are hampered due to weather-related disturbances.
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