India’s thermal coal imports fell by 7% m-o-m to 11.2 million tonnes (mnt) in November compared to 12 mnt in October, as per CoalMint data. This is the fifth consecutive monthly fall in imports.
Imports fell m-o-m amid higher domestic output and weak import demand. The highest drop in shipments was seen from South Africa at 48% m-o-m followed by USA at 15% and Mozambique at 6%.
India has been focusing on improving domestic coal production to achieve its FY23 target of 900 mnt of output. The country’s total coal production in November stood at 76 mnt, rising by 14% m-o-m and 12% y-o-y.
Country-wise shipments
- South Africa: Shipments from the country dropped significantly to 0.87 mnt in November compared to 1.70 mnt in October. This was due to supply disruptions caused due to the derailment at its key rail line in the first week of November. As a consequence, the force majeure was declared on the rail line which was lifted two weeks later.
In addition, demand for South African coal from India was also not quite buoyant since past few months. This was majorly because of slowed steel demand as sponge iron players are the key buyers of South African coal and they were making need-based purchases instead of bulk bookings.
- Indonesia: Coal imports from Indonesia fell marginally by 2% to 7.33 mnt in November. A declining trend in Indonesian coal prices amid weak Chinese and European demand led Indian buyers to inhibit further bookings and wait for further correction in prices. As per Indian traders, there are huge coal stockpiles accumulated at ports while stock and sale activity are a bit sluggish.
- Australia: Australian thermal coal imports into India rose by 14% m-o-m in November to 0.80 mnt. The traditional 5500 NAR grade thermal coal is not arriving at Indian ports but instead, the 4600 NAR grade, used by Indian sponge iron producers, is gaining more popularity. This coal has fixed carbon (FC) content of 42-43% and volatile matter (VM) content of 27-28%. The same is being used to blend with South
African and domestic coal, resulting in the increased imports of this coal. - Russia: Imports of Russian coal were recorded at 1.03 mnt in the month under review as compared to 0.96 mnt in October. Few steel mills were heard to be importing Russian thermal coal to replace it with the costlier Australian counterpart in their smelting processes. Also, few traders had booked Russian thermal coal as the supplies would get disrupted in the country during the upcoming winters.
Indian thermal coal imports in Jan-Nov’22
Total imports in January-November 2022 were recorded at 150.8 mnt, up by 15% y-o-y. Despite elevated prices, India’s imports have gone up this year as 2022 was a non-Covid year and industrial plus economic activities were up and running unlike last year. Also, more than expected hot summers made power plants import more Indonesian thermal coal this year amid the government’s 10% imports mandate.
Outlook
In December, the country’s thermal coal imports are expected to be in the similar range as November or may drop further. This is because most coal consuming sectors have sufficient inventories for the upcoming month and cooler temperature, sluggish steel demand and cheaper availability of pet coke would restrict any significant improvement in demand from the end-users segment.
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