Despite higher thermal coal prices, India’s overall imports of the material in Feb’22 increased to the tune of 8 mnt, up 9.5% m-o-m amidst limited coal supply at Indian ports.
Indonesia supplied the highest volume of thermal coal last month. Shipments from the country rose sharply by 45% m-o-m to 4.1 mnt in Feb’22 as miners prioritised clearing backlogs amidst tight domestic supply.
Even as the export ban was partially lifted in Jan’22 itself, miners underwent a long wait before clearing out vessels last month.
Coal demand at Indonesia’s domestic power utility and independent power plants has risen sharply since the beginning of the year. The government has directed power plants to rebuild coal stockpiles ahead of the summer season to avoid a similar crisis seen in the beginning of this year.
Shipments from South Africa rise
Limited South African coal stock at Indian ports also compelled buyers to import more of the material. Import shipments from South Africa were at 2.3 mnt, up 11% m-o-m in Feb’22.
Amidst a sharp drop in CIL’s coal dispatches to the non-power sector, sponge iron manufacturers were heard bidding more for South African coal with majority of them even making advance bookings.
Imports from Australia decline
Elevated Australian coal prices and supply disruption due to bad weather there, however, resulted in a decline in coal shipments from the country last month.
Shipments from Australia fell 7% m-o-m to 0.9 mnt, while those from USA fell by 54% m-o-m to 0.39 mnt.
Indian cement manufacturers, the biggest importer of thermal coal, were heard to be delaying bookings amidst rising competitive pet coke prices.
Sector-wise imports
Sponge iron: Thermal coal imports by the sponge iron sector recorded a sharp fall of 20% m-o-m to 0.5 mnt in Feb’22. The sharp rise in raw material prices continues to keep the profitability of sponge makers low with majority of units working at lower capacity.
Power: Despite higher prices, limited inventory compelled power producers to raise their imports as it were recorded at 1.8 mnt in Feb’22, up 25% m-o-m. The government on 07 Feb’22 asked the domestic coal sector to increase production to reduce the country’s dependence on imports.
Cement: Thermal coal imports from this sector fell by 33% m-o-m to 0.4 mnt in Feb’22 as manufacturers returned to procuring pet coke over a slight decline in its prices.
Outlook
As per CoalMint’s analysis, elevated thermal coal prices could keep imports under pressure in the upcoming months. Further, with the ongoing tension between Russia and Ukraine, a shift in trade flows may also limit imports.
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