India’s thermal coal imports fell for the fourth consecutive month to 12 million tonnes (mnt) in October, down 9% m-o-m amid higher domestic output and weak import demand.
As per Coal Ministry data, the country’s coal output rose to 66 mnt during October, up 14% m-o-m. Output from CIL rose sharply by 16% m-o-m, followed by the Singareni Collieries Company Limited (SCCL), which increased by 6%, while the output of the other captive mines rose by 9% last month.
Weak procurement activity led to declining shipments from Indonesia, Russia, and Australia. As per CoalMint’s vessel line-up data, thermal coal imports from Indonesia declined to 7.5 mnt, down 11% m-o-m, while shipments from Russia fell by 36%.
Despite falling thermal coal prices last month amid weak European demand, Indian buyers preferred to stick to the sidelines as they awaited for more clarity on prices. At the same time, a depreciating rupee also weighed on overall buying appetite.
Shipments from South Africa and Mozambique, however, rose with procurement demand from sponge iron manufacturers and cement-makers.
India’s thermal coal imports during the first 10 months of the year stood at 139.5 mnt, up 15% y-o-y.
Trade balance
Shipments from traditional geographies
- Indonesia: A falling trend in Indonesian coal prices amid weak Chinese demand compelled Indian buyers to adopt a wait-and-watch approach before making any major bookings.
- South Africa: India’s coal imports from South Africa rose by a whopping 55% to 1.7 mnt as DRI producers booked low-CV RB3 (4800 kcal/kg) coal for blending. Russian coal demand abated as excessive usage of Russian coal was not possible due to the huge percentage of fines in the sponge iron kilns, while the quality of Russian coal is also not consistent given the lack of homogenous blending.
- Russia: Imports from Russia fell for the second consecutive month by 36% in October to 0.96 mnt in Oct’22.
- Australia:Shipments from the country fell by 34% last month amid weak demand as Indian buyers waited for prices to fall further in the coming months amid lower enquiries from Europe. Wet weather conditions in the country also affected production.
- US: Shipments from the US fell 13%, with shipments coming for Ultratech Cement, Adani Enterprise, and JSW Energy.
- Mozambique: Rising demand from a few cement and power companies lifted imports from Mozambique by 13% in October. Among cement-makers, Ambuja Cement and Shree Cement were the biggest buyers of Mozambique coal, while Tata Power and Essar Power booked significant vessels. Adani Enterprise also brought in 0.2 mnt of Mozambican coal.
Sector-wise imports
- Steel and sponge iron: Despite South African coal imports rising last month, overall imports by the steel and sponge iron manufacturers fell by 26% in October amid strong inventory build-up for the next two months.
- Power: Rising electricity demand prompted power companies to build inventory as imports rose by 40% m-o-m to 3.2 mnt last month. Domestic coal dispatches to the sector also rose by 9% to 57 mnt in October. India’s power consumption remained firm at 115 billion units in October.
- Cement: Rising construction activity also prompted cement companies to raise purchase as imports were higher by 58% m-o-m to 0.76 mnt.
Outlook
As per CoalMint analysis, thermal coal imports are likely to remain within a fixed range in the coming month amid increasing domestic output and a depreciating currency. However, the declining trajectory of global coal prices and the rising construction and manufacturing activity during the winter season may also prompt a rise in imports from cement and DRI producers.
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