India’s thermal coal imports in October 2023 picked up by 6% y-o-y to 160.8 million tonnes (mnt) in January- November 2023 as against 151.10 mnt in the same period last year. However, imports dropped by 10% m-o-m to 17.92 mnt in November 2023 as compared to 19.86 mnt in October 2023.
Imports increased from Russia, Mozambique
Imports from Mozambique surged by 59% y-o-y to 8.9 mnt in January- November 2023 as against 5.7 mnt in the same period last year. Moreover, imports from Russia rose by 20% y-o-y to 9.5 mnt in January- November 2023 as against 7.9 mnt in January- November 2022.
In CY’22, global thermal coal trade patterns gradually settled in tandem with reduced risk associated with European energy supply amid adequate coal and gas stocks. This followed supply disruption emerging from the Russia-Ukraine war, post which the European nations had targeted non-Russian markets.
As a result, Indian buyers have augmented their procurement from Russia and Mozambique which offered material at cheaper prices. Besides, uptick in sourcing from the US and Australia has contributed to the import growth.
Imports from Australia rose by 3% y-o-y to 10.7 mnt in January- November 2023 as against 10.4 mnt in January- November 2022. However, shipments from the US surged by around twofold to 12.5 mnt in January- November 2023 as against 6.2 mnt in the same period last year.
In CY’23, China resorted back to Australian coal purchases post-lifting of ban has also worked in favour of increased cargo availability from the non-traditional markets.
Meanwhile, purchases from the traditional thermal coal markets- Indonesia and South Africa picked up in CY’23. India’s thermal coal imports from South Africa stood at 25.3 mnt in January- November 2023 as against 19.1 mnt in January- November 2022, up by 32% y-o-y.
Volatile prices simulate higher buying
Prices of RB2 (5500 NAR), South African coal and 4200 GAR, Indonesian coal dropped 34% y-o-y respectively and are assessed at $117.1/t and $71/t in November 2023. Thermal coal price movement has followed a declining trend encouraging Indian buyers to bolster their purchases of imported coal. Large-scale end users including sponge and cement plants have taken this opportunity to re-stock adequate material amid drop in prices.
The global price decline has also motivated imported coal-based (ICB) plants to replenish their inventory as they prepare to ramp up generation following government directives.
Simultaneously, smaller-scale traders are actively procuring material, recovering from setbacks caused by the higher prices observed in the previous year.
Imported coal-based power units to operate at full capacity
The power ministry has directed imported coal-based plants to run at full capacity till June 2023 and all generation units to import a minimum 6% of their fuel requirement for blending. This is in the backdrop of continued rise in electricity demand, inadequate supply of domestic fuel and lower hydro generation. However, the Ministry extended a mandate to power plants to import coal until March 2024 as the driest August in more than a century pushed electricity demand to a record, putting a strain on supplies of the nation’s main generation fuel.
Domestic thermal coal production
State-run miner Coal India Ltd (CIL) continued its robust performance in terms of thermal coal production in CY’23. CIL’s production rose by 9% y-o-y to 626.08 mnt in January- November 2023 as against 573 mnt in the same period last year.
Monthly imports (Country- wise)
India’s thermal coal imports from Indonesia stood at 10.97 mnt in November 2023 as against 13.26 mnt in October, down 17% m-o-m.
Shipments from South Africa remained largely stable m-o-m to 2.82 mnt in November as against 2.78 mnt in October. Shipments from the US were recorded at 1.71 mnt compared to 1.40 mnt in October. Moreover, shipments from Australia dropped 6% m-o-m to 1.08 mnt as against 1.15 mnt in October. Exports from Mozambique surged by 82% to 0.84 mnt in the month under review.
Qty in mnt
Adani Enterprises recorded the highest imports at 3.40 mnt in November 2023, down by 15% m-o-m as against 4 mnt in October. Adani power rose by 6% in monthly import volumes at 1.80 mnt followed by Tata Power at 1.40 mnt. Tata International recorded a significant surge in imports during the month under review.
Thermal coal imports are anticipated to rise in CY’23 buoyed by falling global prices. However, in the upcoming months, imports are anticipated to be on lower side as sponge producers exhibit subdued demand, influenced by market bid-offer disparities. Additionally, imports from Indonesia are expected to be constrained due to a supply crunch.