The Coal Trader

India thermal coal imports down 11% MoM in January

India: Thermal coal imports drop nearly 10% m-o-m in Jan'24 on rising domestic production

India’s thermal coal imports in January 2024 dropped by 11% m-o-m to 13.65 million tonnes (mnt), as per CoalMint data. Imports rose by 27% to 13.65 mnt in January 2024 as compared to 10.75 mnt in January 2023.

Factors supporting drop in coal imports:

Rise in domestic production-

State-run miner Coal India Ltd (CIL) continued its robust performance in terms of coal production in January 2024. CIL’s production rose by 9.1% y-o-y to 78.4 million tonnes (mnt) in January 2024 as against 71.9 mnt in January 2023. Notably, the company’s total production in financial year 2024 (FY’24) (April- January) recorded at 610.3 mnt, rise of 10.8% as against 550.9 mnt in FY’23 (April-January).

Rising stockpiles

A surge in stockpiles for CIL is apparent, with a surplus inventory reaching 60.2 mnt by January 2024, compared to 49.46 mnt in December 2023.This surplus contributes to the decline in thermal coal imports.

Supply constraints in major exporting countries

India’s coal imports were affected for the month by supply constraints in major exporting nations. Indonesia faced a decline due to a shortage linked to pending RKAB (quota approval) processes.Also, rains in Sumatra and Kalimantan persistently disrupted production at mines and loadings at many ports. Several miners are unable to make offers as they had to reduce their output due to the rains. The continuous rainfall led to loading issues in Indonesia, causing some mines to temporarily halt operations. Indian imports experiences a notable downturn from South Africa after a Transnet train collision near Richards Bay, causing a week-long halt and worsening transportation challenges. Persistent issues such as derailments, equipment shortages, vandalism, and adverse weather conditions collectively contribute to a substantial drop in coal imports to India.

Country-wise imports

India’s thermal coal imports from Indonesia stood at 8.05 mnt in January 2024 as against 9.36 mnt in December 2023, down by 14% m-o-m.

Shipments from South Africa dropped by 2% m-o-m to 2.31 mnt in January 2024 as against 2.36 mnt in December 2023. Shipments from Australia rose by 32% m-o-m were recorded at 0.98 mnt compared to 0.74 mnt in December 2023. Moreover, shipments from the US dropped by around 47% at 0.86 mnt as against 1.63 mnt in December 2023. Exports from Mozambique rose by 24% m-o-m to 0.73 mnt as against 0.59 mnt in the previous month.

Company-wise imports

Adani Enterprises recorded the highest imports at 2.61 mnt, dropped by 8% m-o-m as against 2.83 mnt in December 2023. Adani power rose by 2% in monthly import volumes at 1.71 mnt followed by Agarwal coal at 0.93 mnt. Rashmi Group recorded a significant surge in imports during the month under review.

Port-wise imports

Mundra port imported the highest volumes of 1.85 mnt, followed by Krishnapatnam at 1.20 mnt. Gangavaram and Dahej ports received cargoes of 1.16 mnt and 0.98 mnt, respectively. Moreover, total coal volumes at Dhamra and Tuticorin rose by 52% and 81% respectively.

Recent development-

CIL to increase production from under ground mines

CIL has targeted to increase its production of coal from underground (UG) mines to 31 mnt in the current financial year, FY24. CIL aims to enhance its coal output from UG mines to 31 mnt in FY 24 and also anticipates to increase it to 42 mnt in FY25. UG mining entails higher costs compared to open cast mining. However, with growing mechanisation it may be possible to extract more fuel from deposits and it is more environment friendly.

SCCL targets 70 mnt of production in current fiscal

Singareni Collieries Company Ltd (SCCL) aims to mine 14 mnt of coal in Feb’24 and Mar’24, to reach the target of 70 mnt for the current financial year. Executives were instructed to achieve a daily coal production and dispatch of 0.23 mnt to meet this goal. Till January-end, the production achieved was 56.3 mnt and dispatch of coal was 57.23 mnt.

Outlook

Thermal coal imports are anticipated to see a drop in the near term amid subdued demand and robust domestic supply in India continues to fulfill local demand, posing potential pressure on thermal coal imports.

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