After touching a record low of 7.03 mn t in Jun’20, Indian thermal coal import shipments have shown a significant rise of 60% m-o-m in July at 11.2 mn t, CoalMint vessel line-up data reveals. In Jul’19, the same stood at 13.3 mn t.
Indonesian coal imports return to pre-lockdown level
- This surge can be attributed to increase in thermal coal imports especially from Indonesia (+68% m-o-m) at 6.74 mn t.
- Indonesian coal – majorly used in power sector in India, had increased demand in July as the Indian economy crawled back to normalcy with easing of lockdown restrictions. This can be verified from the rise in country’s power consumption by 6.6% m-o-m in July at 113.5 BU (Billion Units).
- Also, India’s PMI (Purchasing Managers’ Index), an indicator of business activity – both in the manufacturing and service sector in Jul’20 stood at 46 against a record low of 7.2 in Apr’20 when nation-wide lockdown was in place.
Anticipated price rise drives up S.African coal imports
- Thermal coal imports from another key destination, South Africa increased by 16% m-o-m and stood at 2.75 mn t in Jul’20. South African coal is majorly used by cement and sponge iron sectors.
- According to industry experts, there has been recovery in steel demand in last one month especially in rural areas as compared to urban ones as economic activities continue in rural areas, which have been less affected due to the pandemic.
- It can be observed that sector-wise, highest increase of 37% and 36% m-o-m in coal imports were recorded by traders at 4.63 mn t and power sector at 4.61 mn t respectively in Jul’20. Market participants attribute this rise to the likelihood of increase in imported coal price in the upcoming months when global economies open up further.
Other countries
For the last month, India’s thermal coal imports from other countries like Mozambique (0.21 mn t), Russia (0.21 mn t), and Australia (0.48 mn t) also seem to return to pre-lockdown levels.
Outlook
The monthly average thermal coal imports in 2018 and 2019 stood at around 15.3 and 15.5 mn t respectively.
While July’s imports are still lower as compared the monthly average of last two years, it would increase in the August driven by anticipated increase in imported coal price and recovery in industrial activities further, as the number of localised lockdowns announced by local and state government in August would be lesser than last month.
India’s total coal imports surge by 41% in July
Indian total coal import shipments (excluding pet coke) have shown a significant rise of 41.2% m-o-m in Jul’20 at 14.4 mn t against 10.2 mn t in Jun’20.
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