Continuing the declining trend of the last two months, India’s thermal coal imports have recorded a significant plunge of 31% m-o-m at 10.3 mn t for February, vessel line-up data with CoalMint revealed.
Indonesia continued to be the top exporter of thermal coal to India at 5.59 mn t. However, its imports fell by 34% m-o-m basis in February. The steepest drop of 63% was recorded in case of imports from South Africa that stood at 1.11 mn t.
Imports from Mozambique also recorded a drop of 26% at 0.16 mn t. Bucking the trend was Australia, which registered a 4% m-o-m increase of exports to India at 2.31 mn t in February.
Looking at sector-wise thermal coal imports in Feb ’21, except for cement, all the other sectors, including traders, Power and Sponge iron have registered a m-o-m drop of 38%, 30% and 19% respectively. The cement sector’s imports have moved up by 10% m-o-m in Feb’21 and stood at 1.38 mn t.
Importers retreat amid tepid demand and rising freight
Amid empty vessels shortage, especially in Asian market caused by snap lockdowns in U.S. and Europe and increased demand from China, sea freights from Indonesia and South Africa escalated between 40-60% m-o-m basis making Indian importers postpone their purchases.
Sector-wise demand scenario
Sponge iron: The demand for South African coal in India plunged in February amid lacklustre requirement from sponge sector, sufficient stock at port (monthly average of 3 mn t) and Raipur market’s sponge buyers opting for domestic coal (given its cost advantage) offered by Coal India subsidiary, SECL via auction.
IMR Resources was the top importer of South African coal at 0.24 mn t followed by AMNS at 0.17 mn t.
Power: India’s power consumption fell by 6% m-o-m in February and stood at 104.7 BU (billion units) against 111.4 BU in Jan’21 as per the official data, which justifies the country’s drop in Indonesian coal imports during the month. Indian power producers are also switching to domestic coal amid increased Indonesian coal prices and higher freights. India’s domestic production recorded an increase of 2.5% m-o-m in February at 61.8 mn t.
Cement: The cement sector buyers continued to prefer Australian coal that turned cheaper amid Chinese ban on Australian coal, resulting in increased imports since past few months. Adani Enterprise was the top importer of Australian coal at 0.49 mn t in Feb’21 followed by JSW Energy at 0.29 mn t.
Outlook:
As the freight rates continue to remain elevated and domestic coal is available in sufficient quantity, Indian importers are wary of making any major bookings. While South African and Indonesian coal imports would remain subdued, Australian coal imports are anticipated to fall this month amid higher prices and comparatively cheaper U.S. coal on per CV basis.
Leave a Reply