India’s thermal coal imports rose by 16% m-o-m to 10.8 million tonnes (mn t) in Oct’21, amidst an acute domestic coal supply shortage last month. The rise in imports came despite a volatile global thermal coal market wherein prices reached multi-year highs, before correcting towards the month-end.
As per CoalMint’s vessel line-up data, imports from Australia and South Africa were the highest at 2 mn t each, up 108% and 35% respectively m-o-m. Imports from Indonesia, however, fell slightly by 8% m-o-m to 5.4 mn t in Oct’21.
Interestingly, old Australian cargoes of 0.50 mn t, lying at Chinese ports made their way to India in October being comparatively cheaper against fresh cargoes. Adani Enterprise and cement companies such as Ramco Cement and Ultratech Cement were the key buyers of such cargoes.
After a constrained coal supply scenario over the last few months, Coal India’s production rose sharply by 23% m-o-m to 50 mn t in Oct’21, while its dispatches were at 57 mn t, up 17% m-o-m.
| Month | Production | Offtake |
| Apr’21 | 41.89 | 54.13 |
| May’21 | 42.08 | 55.14 |
| Jun’21 | 40.01 | 51.34 |
| Jul’21 | 42.58 | 50.59 |
| Aug’21 | 42.6 | 48.73 |
| Sep’21 | 40.65 | 48.42 |
| Oct’21 | 49.8 | 56.66 |
Global thermal coal prices fluctuate
After rising sharply to cross the $250/t-mark for high-CV coal in mid-October, global thermal coal prices began their declining trajectory and corrected by 10% by month-end following the Chinese government’s intervention to stabilise domestic coal prices there.
The Chinese coal futures plunged by 54% on the Zhengzhou Commodity Exchange towards the month-end from their historical high of RMB 1,908 /t ($298/t) on 19 Oct’21.
Port-wise imports of thermal coal
| Indian Ports | Sept’21 | Oct’21 | % Change (m-o-m) |
| Ex-Mundra | 0.52 | 0.46 | -11 |
| Ex-Gangavaram | 0.65 | 1.19 | +84 |
| Ex-Krishnapatnam | 0.90 | 1.18 | +31 |
| Ex-Vizag | 0.37 | 0.82 | +120 |
| Ex-Mangalore | 0.34 | 0.13 | -63 |
*Qty in mn t
Impact on end-user segments
Sponge iron: As the government prioritised coal supplies to the power plants last month, sponge iron manufacturers continued to remain heavily dependent on expensive imports. Further, with depleting coal stocks at ports, several cargoes were also booked in expectation of prices rising further.
Power: India’s power consumption remained largely unchanged m-o-m at around 114 billion units in October. Owing to the sharp rise in domestic coal supply to the power plants last month, imports dropped sharply by 15% m-o-m.
Cement: Rising construction activity during the festive season compelled cement manufacturers to buy especially Australian coal that was comparatively cheaper against other-origins.
Outlook
As per CoalMint’s analysis, thermal coal imports are likely to remain supported in the upcoming month due to the recent drop in global prices and on expectations of price stability. However, any sharp rise in imports is likely to be limited due to the improving domestic coal supply scenario in the country.
Leave a Reply