Indian thermal coal imports drop marginal 2% in Sept’21 on elevated prices

India’s thermal coal imports fell by 2% m-o-m to 9.32 million tonnes (mn t) in Sept’21. The drop was due to to the elevated global thermal coal prices. But, nonetheless, the drop was marginal because of the domestic coal shortage.

As per CoalMint’s vessel line-up data, while imports from Indonesia rose 11% m-o-m to 5.85 mn t in Sept’21, those from South Africa and Australia fell 19% and 14% respectively m-o-m.

Interestingly, some relatively cheaper old Australian cargo had been lying at Chinese ports. Some Indian buyers last month had booked these China reloaded Australian coal , which led to a 46% m-o-m rise in shipments from China to 0.40 mn t.

Country-wise coal imports

*Qty in mn t

Imported coal prices rise 36% in Sept’21

China’s robust demand for coal restocking ahead of its severe winter pushed up global thermal coal prices last month.

Indonesian high CV (5,800 GAR) prices moved up to $150/t in Sept’21, up 24% m-o-m, while Australian and South African (5,500 NAR) rates have risen 36% and 28% m-o-m  in September.

Port-wise imports of thermal coal

 *Qty in mn t

Sector-wise demand scenario

*Qty in mn t

Sponge iron: As the government prioritised domestic coal supplies towards the power plants, sponge iron manufacturers were left with little option than to buy high-priced RB2 coal. However, given the rally in imported South African coal prices, Indian importers avoided making any major bookings last month and continued filling the supply gap to industries with previously bought cargoes.

Power: India’s power consumption witnessed a 12% m-o-m decline in Sept’21 at 114.49 billion units (BU), as per official data. The fall in power demand was mainly attributed to heavy rains across states last month. However, as coal inventory at Indian power plants dropped to lower than a week’s amid domestic supply crunch, power companies booked imported coal despite elevated prices to avoid any major blackout.

Cement: Rising demand for construction activity ahead of the festive season also compelled cement manufacturers to buy highly priced imported coal. However, with the increased input costs, prices of cement witnessed a considerable rise. 

Outlook

As per CoalMint’s analysis, thermal coal imports are likely to rise in the upcoming month amid the ongoing domestic coal supply crunch.

However, the improving coal supply situation at a few mines in the country and the rising trajectory of global thermal coal prices may cap any sharp rise in imports.