India’s coal imports fall by 8% in Nov ’20 owing to high stockpile at ports

Indian thermal coal imports in Nov ’20 stood at 15.6 mn t against 16.9 mn t in Oct ’20, down by 8% m-o-m and 3% y-o-y basis.

• A drop of 9% m-o-m was recorded in imports from key India’s key exporter – Indonesia at 9.81 mn t in Nov’20. Whereas, imports from South Africa moved up by 2% at 3.54 mn t.
• Imports from U.S, Mozambique and Australia also recorded a fall of 16%, 53%, and 15% and stood at 0.62 mn t, 0.20 mn t and 1.12 mn t respectively.
• The key reason for fall in coal imports is high quantity of thermal coal booked by traders in Oct ’20, when prices were lower as compared to Nov’20 prices.
• Another reason being huge stock of thermal coal piled up at Indian ports. The average thermal coal stock at Indian ports in Nov ’20 stood at around 17 mn t against 11 mn t in Nov ’19.

Power and traders’ imports drop by 2% and 22%

• Out of total imports by various sectors, power sector’s thermal coal imports stood at 4.99 mn t (down by 2% m-o-m), whereas, imports by the cement sectors stood at 1.76 mn t (up by 76% m-o-m) in Nov ’20.
• India’s power consumption fell by 11.3% in Nov ’20 m-o-m to 98.4 billion units amid onset of early winters especially in the Northern part of the country.
• The top direct importer was Adani Power with all the imports of 1.73 mn t from Indonesia, followed by Coastal Gujrat Power at 0.88 mn t and SEMB Corp Gayathri Power at 0.28 mn t.
• The direct thermal coal imports made by traders recorded a significant drop of 22% m-o-m to 7.15 mn t with Adani Enterprise being the top importer at 1.98 mn t followed by Agarwal Coal at 0.79 mn t.

Imports by cement sector surges in November

• Imports by cement sector have recorded an increase of 76% m-o-m in Nov ’20 at 1.76 mn t, with most of it from Australia and Indonesia at 0.56 mn t and 0.52 mn t respectively.
• Out of all the direct imports made by cement manufacturers, highest quantity (0.92 mn t) was booked by Ultratech Cement combined followed by Shree Cement at 0.19 mn t and Saurastura Cement at 0.13 mn t.
• Market reports suggest that the cement demand recovery seen in October across India sustained in November largely aided by pent-up rural demand ahead of the festive season. Some pick-up in infrastructure and allied-activities have also contributed to volume growth in certain markets in India.

Outlook 

With the onset of winters, India’s coal demand from power sector would suffer but amid positive outlook for the cement sector, its import bookings would continue. However, the huge inventory build-up at ports and rising imported coal prices would deter the traders and even end-users to make extravagant import bookings resulting which India’s thermal coal imports in December would not see any dramatic rise.