The trajectory of India’s thermal coal imports from Russia kept rising as many sectors, including power and non-power, continued experimenting with Russian coal due to competitive prices and higher calorific value.
Coal imports from Russia hit the highest level since the beginning of this year in July at 1.34 million tonnes (mnt), as per CoalMint vessel data.
Market participants expect the numbers to rise further in the coming months as sponge iron manufacturers, cement producers, power utilities and other allied industries have been using higher volumes of Russian coal for blending purposes amid elevated prices of coal from other origins.
Similar interest has emerged for Mozambican coal as imports from that country rose 230% m-o-m in July at 900,000 t. A major sponge iron manufacturer, JSPL, having mines in Mozambique has experimented with the premium grade VT-1 coal in its sponge iron unit. The company has assured that Mozambican coal can reduce reliance on South African coal imports.
Import Data
*Qty in mnt
India’s thermal coal imports, however, fell 9% m-o-m fall to 18.9 mnt in July as shipments from traditional destinations like Indonesia and Australia fell.
Demand from traditional markets ease
Despite stable Indonesian coal prices last month, shipments from the country fell 18% as the power sector mainly sourced coal via domestic suppliers while other industries worked at minimal capacity due to monsoons and elevated coal prices.
Imports from Australia fell sharply by 41% as heavy flooding at Newcastle Port weighed on overall coal exports from the country.
Shipments from South Africa, however, rose 9% as demand for low-CV RB3 (4800 kcal/kg NAR) coal remained robust and while imports from the USA rose remarkably by 110%, rise in volumes remained on the lower side compared to other origins.
Sector-wise imports
*Qty in mnt
Sponge iron: Thermal coal imports by the sponge iron manufacturers rose as domestic supply remained under pressure. Imports climbed 23% in July with shipments from Mozambique, Russia and South Africa.
Power: The onset of monsoon across the country there was a drop in coal-fired power generation. This, coupled with CIL’s coal dispatches to the power sector, resulted in a 12% decline in thermal coal imports by utilities.
Cement: Thermal coal imports by the cement sector fell 16% last month as easing pet coke prices resulted in a 71% rise in pet coke imports by the sector.
Outlook
As per CoalMint analysis, the domestic coal supply crunch confronting the non-power sector is likely to push imports higher next month, with higher shipments from Russia. Imports by the power sector may drop following the government’s recent directive to lower the coal import target for producers.
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