India’s thermal coal import from Colombia had increased by more than 95% in May’16; sourced about 0.7 MnT coal during the month.
Rising South African thermal coal index along with lower CNF offers with weaker freight market has prompted Indian buyers for purchases. India conventionally purchases thermal coal from South Africa, but in May’16 first time the nation had made its highest purchase of about 0.7 MnT from the country.
It is to be noted that earlier India was importing largely Met coke from Colombia. While, the country sourced about 0.5 MnT Met coke during 2013-2015. However, lower Colombian FoB offers and falling freight market seems attractive for Indian utilities at present.
However, since the beginning of FY17, Colombian coal has been reflecting as a biggest substitute for South African RB1 coal.
Colombian coal import in India
As per SteelMint analysis, the country has been rising its monthly shipments from Colombia on the wake of lower offers received for Colombian coal. The country had imported 98% more coal in May’16 to 0.7 MnT, which was 0.3 MnT in Apr’16.
Source: SteelMint
Quantity in 000’MT
Essar Steel, JSW Steel, Adani Power and Tata Steel have emerged as India’s biggest importers of Colombian coal. The companies agreed to import thermal coal from Colombia for the first time owing to upward South African coal index, which has been rising constantly since Jan’16.
In India, most of the imported Colombian coal majorly used in power plants and a small quantity also goes into cement production.
[su_pullquote align=”right”]Coal trading sources pointed out that “Colombian coal offers were corrected sharply during Feb’16-Mar’1. Meanwhile, freight market was also at downside, which increased bookings in India. Mostly, end users are taking position in India as large vessel shipments being feasible for them. Colombian coal is being traded in Capsize vessels owing to cheaper freight rates.”[/su_pullquote]
Colombian coal prices to India
Currently, the global coal market is strongly oversupplied by Colombian coal, mainly due to the slowdown in Europe demand and imports. Falling demand for Colombian coal in Europe led to fall in coal index significantly.
Colombian 6000 NAR thermal coal has been traded in India as suitable for Indian power and cement production. Currently, it is being offered at USD 46-48/MT FoB for Jun’16 loadings. While, CNF India offers are heard at USD 57-58/MT West Coast ports.
Earlier during Feb’16-Mar’16, Colombian 6000 NAR coal offers were hovering within USD 40-42/MT FoB and about USD 49/MT CNF West Coast Indian ports. Moreover, offers are high now as driven by South African coal index and higher sea freight rates. But still, Colombian coal is cheaper by about USD 3-4/MT compared to South African coal.
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