India which is a major coal importer especially that of non-coking has registered a considerable increase in the same in CY 2019. According to the vessel line-up data compiled by CoalMint Research, India’s total coal imports have registered a rise of 4.22% y-o-y basis and stood at 245 MnT in 2019 against 235 MnT in previous year of 2018.
India’s total Non-coking coal Imports have been recorded at 185.6 MnT in CY19, up by about 5.39% over 176.1 MnT recorded in CY18, highest ever.
*Looking at the party-wise imports, the two major non-coking coal importers were Adani and Agarwal Coal. The Non-coking coal Import to Adani in CY19 stood at 41.3 MnT (up 21% Y-o-Y), highest since CY15 and to Agarwal Coal at 12 MnT (up 21% Y-o-Y), highest ever.
*In case of Coastal Energen Pvt Ltd, the same recorded a significant fall of 74% y-o-y basis and stood at 0.34 MnT, lowest ever and the same to JSW Steel at 7.2 MnT (fall of 32% y-o-y).
*In case of country-wise imports, the highest imports were booked from Indonesia as the same stood at 118.1 MnT in CY19 against 105.8 MnT in CY18, up by 12%. The imports from South Africa also registered a rise of 13% y-o-y basis from 37.3 MnT in CY18 to 42 MnT in CY19, a rise of 13% y-o-y.
*India’s non-coking coal imports from U.S. and Australia recorded a plunge of 27% and 26% respectively on y-o-y basis and stood at 8.91 MnT and 6.50 MnT respectively.
In terms of coking coal, the import in CY19 stood at 55 Mnt compared to 53 MnT in CY18.
*Looking at party-wise imports, coking coal Import by SAIL stood at 13 MnT (fall of 6% Y-o-Y) and by JSW Steel (up by 29% Y-o-Y)
*Imports by Tata steel have risen by 37% in CY19 to 11 MnT against 8.1 MnT in CY18 and Tata Steel replaced JSW Steel to become the 2nd-largest coal Importer.
*In case of country-wise imports from major countries, highest imports were booked from Australia at 40.8 MnT in CY19 (similar level that of CY18), followed by Canada at 4.72 MnT (up by 65% y-o-y), U.S. at 3.56 MnT (down by 15%) and Russia at 2.39 MnT (up by 84%).
India’s Met Coke import declined by 33% y-o-y to 3.3 MnT in CY19 against 4.93 MnT in CY18 and lowest since CY15. The highest import came from Poland at 0.74 MnT (up by 14% y-o-y) followed by Russia at 0.60 MnT (up by more than 200%) and China at 0.47 MnT (down by 79% y-o-y).
What led to surge in India’s coal imports?
India’s import bill for coal has risen from USD 14 billion in 2014 to USD 26 billion in 2019. A number of regulatory and industrial factors are responsible to impact India’s domestic coal production, thus increasing the country’s reliance on imported coal.
In terms of non-coking coal which is majorly used by the power sector, a host of power plants have come cup in coastal areas where imported coal is more competitive than Indian coal due to high transportation costs. Generally, most plants in India blend both low calorific Indian coal and the high calorific imported version to improve productivity. Also, coking coal, one of the most important requirements in manufacturing steel, is not abundantly available in India. So, the entire coal import of India is not substitutable.
Will India’s dependency on coal imports continue?
India is focusing on increasing domestic coal production in order to reduce its dependency upon imports for which it has adopted a host of measures. The government has set a target of 1.5 billion tonnes coal production by FY24, of which Coal India’s mandate is 1 billion tonne. It has introduced reforms such as removal of end-use requirements for miners, allowing auction of coal-bearing areas to private parties for commercial mining in February 2018, which ended the monopoly of Coal India, and clearing 100% FDI (foreign direct investment) through the automatic route in commercial coal production for captive use by steel, power and cement, in August 2019.
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