Thermal coal traffic handled at Indian ports have dropped sharply in financial year 2021-22 (FY22) by 17% to 198.7 million tonnes (mnt) compared to FY20 (the pre-Covid year), CoalMint data reveals, because of weak demand sentiments brought on by escalated global prices in FY21.
However, on a y-o-y basis, coal traffic rose slightly by 2% over FY’21.
The decline in imports was attributed to supply disruption arising out of logistic concerns across major exporting countries besides sky-high global prices.
The rising trend in thermal coal prices began in October 2021 following a major coal supply crunch in China. The rally continued later with the Indonesian government’s coal export ban in January and the sanctions on Russian coal by major economies in the world later in February and March.
Port-wise coal stock
*Quantity in mnt
An analysis of the trend in thermal coal traffic at major ports in the country shows that the same for Paradip Port rose sharply to 34 mnt in FY22 as major end-users directly bought their cargoes to stock up on inventory.
At major other ports, including Krishnapatnam, Mundra, Ennore, and Gangavaram, stocks declined.
Mundra Port witnessed the highest decline in cargo volumes to 11.9 mnt in FY22, down by 48% y-o-y. The port majorly receives Indonesian coal for captive power plants. Elevated coal prices last year resulted in a slight decline in imports by these plants.
Thermal coal shipments at Gangavaram Port also fell to 9.5 mnt, down by 19% y-o-y as elevated South African coal prices weakened the buying appetite of the sponge iron sector who are the highest buyers from the port.
Vizag and Dhamra ports recorded the highest increase in coal traffic last year that were at 12.1 mnt and 7.6 mnt, respectively, rising by 67% and 35% on a y-o-y basis.
Outlook
Amidst the persistent rise in global thermal coal prices since the beginning of CY22, imports of the fuel at Indian ports are likely to be limited.
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