India: Thermal coal imports fall nearly 15% in September amid reduced shipments from Indonesia, Russia

India’s thermal coal imports fell for the third consecutive month to 13.3 million tonnes (mnt) in September, down  14% m-o-m with declining shipments from Indonesia and Russia. As per CoalMint’s vessel data, thermal coal imports from Indonesia declined by 8.4 mnt, down 23% m-o-m, while shipments from Russia fell 12% amid logistics constraints.

A depreciating Indian rupee also weighed on overall buying appetite as any major rise in imports from other sources was capped. After declining in the last few months, thermal coal imports from Australia, South Africa, and the US rose in September.

India’s thermal coal imports during the first nine months of the year stood at 127.5 mnt, up 15% y-o-y.

Trade balance

*Qty in mnt

Shipments from traditional sources

• Indonesia: With the rise in Indonesian coal prices amid China’s renewed interest, Indian buyers moved to the sidelines as power utilities relied on domestic coal. Easing power demand during the monsoon season also led to the decline in shipments last month.
• South Africa: After falling sharply last month, coal imports from South Africa rose by 21% to 1.1 mnt with a majority of shipments in the low-CV category. DRI producers are heard to be using a blend of high-CV Russian supplies with South African RB3 (4800 NAR).
• Australia: Shipments from the country rose by 12% last month with cargoes that were delayed due to major floods in July. Interestingly, imports from Australia witnessed a 13% increase following major floods in July. Adani Enterprises sourced 4600 kcal/kg NAR grade coal from its Charmichael mine in Australia amid rising usage in the south India-based sponge iron units.
• US: Shipments from the US rose by a whopping 165% last month, with higher shipments by Ultratech Cement and Adani.
• Mozambique: Imports fell slightly by 3% in September amid weak demand by the Indian sponge iron manufacturers. Apart from a few major DRI producers, other iron units were heard blending South African coal with Russia, Australian, and domestic coal.

 Sector-wise imports

• Sponge iron: Imports by sponge iron manufacturers rose by 20% last month as they increasingly blended South African coal with Russian and the Australian material. DRI producers focussed on building inventory amid expectation of higher prices going ahead.

• Power: With improving coal inventory at power plants, thermal coal imports by the power sector fell 25%. India’s power consumption remained firm at 130 billion units in August but rainfall in several parts of the country brought temperatures down and tempered demand for air conditioners.
• Cement: Competitive pet coke and Russian thermal coal prices, on the other hand, dragged down coal imports from the cement sector for the third consecutive month.

Outlook

As per CoalMint analysis, thermal coal imports are likely to remain within a fixed range in the coming month amid a depreciating currency and the festive season in October. Cost-competitive Russian supplies may gain favour with buyers.