India’s thermal coal imports fell for the second-straight month to 15.4 million tonnes (mnt) in August, down by 19% m-o-m on decline in shipments from traditional coal exporting destinations amid rising demand for cost-competitive Russian supplies.
As per CoalMint vessel line-up data, thermal coal imports from South Africa witnessed a steep decline of 56% while deliveries from Indonesia fell by 16% last month. The change in buying patterns of domestic end-users in recent months has resulted in a major decline in shipments from these traditional destinations. Russian imports, on the other hand, rose sharply by 27%.
Interestingly, imports from Australia witnessed a 13% rise in shipments following major floods in July. Adani Enterprises was the largest buyer of Australian coal last month with 4600 kcal/kg NAR grade coal from Charmichael mine amid its rising usage in southern India-based sponge iron units.
India’s thermal coal imports during the first eight months of the year stood at 114 mnt, up by 12% y-o-y.
Trade balancing
*Qty in mnt
Shipments from traditional sources
- Indonesia: Despite stable Indonesian coal prices amid weak Chinese demand, Indian power utilities went slow on coal procurement from Indonesia as the government annulled its 10% blending directive for power plants.
With improving coal inventory at power plants and steady domestic production, power utilities are focused on domestic coal sourcing. Coastal power plants, on the other hand, that are predominantly based on imported fuel, made limited purchases as Indonesian miners offered premiums.
India’s coal production increased by 8% y-o-y to 58.33 mnt in August 2022. However, it fell slightly by 3% on a monthly basis. Output from Coal India was the highest at 46.2 mnt.
- South Africa: Rising usage of high-CV Russian coal in the sponge iron kilns has led to a decline in South African coal imports as the former is cheaper by $40/t over South African mid-CV coal. DRI producers are heard to be using a blend of high-CV Russian supplies with local coal to compensate for the low VM in the former.
- USA: Shipments from USA fell by a whopping 76% m-o-m to 0.20 mnt due to elevated prices and higher voyage period. Cement and the brick manufacturers who are the traditional users of US coal were seen procuring Russian raw material.
- Mozambique: Imports declined sharply by 22% in August with only a few companies bringing in shipments. Mozambique coal demand in the sponge iron sector weakeed as DRI units were concerned about its higher sulphur content.
Sector-wise imports
- Sponge iron: The shift in buying pattern of sponge iron manufacturers resulted in a 32% decline in imports last month. While the southern and eastern zone increased their Russian coal bookings, the central hub of DRI producers moved to the sidelines, avoiding imports from South Africa.
- Power: With improving coal inventory at power plants and the onset of monsoon across the country, thermal coal imports from the power sector fell by 11%.
- Cement: Competitive pet coke and Russian thermal coal prices, on the other hand, dragged coal imports from the cement sector by 47%.
Outlook
As per CoalMint analysis, elevated global coal prices are likely to influence Indian end-users to go for higher cost-competitive Russia coal. However, imports from traditional destinations may also remain stable as manufacturing units are gradually reopening post-monsoon.
Leave a Reply