India’s thermal coal imports fell 21% m-o-m to 10.11 million tonnes (mn t) in Jul’21 as against 12.8 mn t in Jun’21, CoalMint’s vessel line-up data revealed.
Amid surging global thermal coal prices and resilient vessel freight rates, imports from all the major countries fell last month.
In fact, this is the second straight month in which imports have fallen.
Coal imports from Indonesia fell by 9% to 4.32 mn t in Jul’21, while imports from South Africa dropped by 19% to 2.40 mn t on a m-o-m basis.
Coal imports from Australia plunged 54% in July to 1.45 mn t while Russian coal imports also registered a steep 50% drop at 0.24 mn t.
Sector-wise coal imports
| SECTOR | Jun’21 | Jul’21 | % Change m-o-m |
| Trader | 5.80 | 5.04 | -13.12 |
| Power | 3.52 | 2.54 | -27.72 |
| Cement | 1.27 | 0.90 | -29.23 |
| Steel and sponge iron | 1.23 | 1.10 | -10.81 |
| Others | 0.43 | 0.19 | 55.14 |
*Qty in mn t
Imported prices rise 12-28% in Jul’21 across origins
South African coal prices have moved up in Jul’21 amid supply issues at Transnet and Force Majeure at ports amid a cyber attack. Price of the RB2 (5,500 NAR) grade moved up by 13% m-o-m in Jul’21.
The Indonesian 4,200 GAR has risen by 9% m-o-m, whereas the Australian benchmark 5,500 NAR thermal coal prices averaged $95/t in Jun’21, up 28% m-o-m.
A domestic supply crunch in Indonesia pulled up its thermal coal prices last month. Indonesian prices are seen rising further as the government has currently imposed sanctions on coal exports to 34 companies to meet the domestic supply shortfall.
On the other hand, risen demand from Japan, South Korea and Taiwan has pushed up Australian thermal coal prices.
A port-wise analysis shows that the highest quantity of thermal coal has been imported at Vizag Port at 0.66 mn t while there were no thermal coal imports at Bedi and Mangalore ports in Jul’21.
Port-wise import of South African coal
| Indian Ports | Jun’21 | Jul’21 | % change m-o-m |
| Ex-Gangavaram | 0.48 | 0.16 | – 66.46 |
| Ex-Dhamra | 0.42 | 0.33 | -21.37 |
| Ex-Vizag | 0.33 | 0.66 | +98.88 |
| Ex-Paradip | – | 0.24 | +100.00 |
| Ex-Krishnapatnam | 0.41 | 0.24 | -42.28 |
*Qty in mn t
Sector-wise demand scenario
Sponge iron: Rising prices of thermal coal compelled sponge iron units to shift to blending with the proportion of domestic coal higher than imported. Weak sales growth of sponge iron forced them to reduce their capacity utilisation and consequently their coal requirements.
Power: India’s power consumption witnessed a 9% m-o-m growth in Jul’21 at 125.51 billion units (BU), as per official data. Despite the rise in consumption due to easing of lockdown curbs and delayed monsoon, majority of the power companies were heard using domestic coal or increasing their imported coal blending, due to the constant price structure of long-term contracts. Several power companies have been reeling under losses.
Cement: Rising raw material prices also took a toll on coal procurement of cement plants as demand for domestic coal was the dominant factor over imported coal.
Outlook
As per CoalMint’s analysis, the continuous rise in thermal coal prices is likely to dent India’s coal imports in the upcoming months. However, with the end of the monsoon nearing, it is likely that imported coal demand will pick up in the coming months, despite elevated prices.
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