India: Coking coal imports fall by 23% in July; shipments from Russia rise

India's coking coal imports dropped by 23% m-o-m to 4.12 million tonnes (mn t) in July 2022 as against 5.29 mnt seen in June, CoalMint's vessel line up data reveals. Meanwhile, on a y-o-y basis, the import volumes came down by 28%. The fall in coking coal imports came despite a 36% fall in its prices as the same for Australian premium grade coking coal averaged at $240/t in July.

India's PCI coal import shipments fell by 9% m-o-m to 1.04 mnt in July 2022 but rose by 7% on a y-o-y basis. PCI coal prices fell by 40% m-o-m in the month.

The drop in coking coal imports can be attributed to the 15% export duty in place on steel exports. India's finished steel exports fell by 75% y-o-y to 0.38 mnt in July. In fact, the country turned out to be the net importer of finished steel for the first time since January 2021. India's crude steel production in July remained largely unchanged m-o-m at 9.97 mnt.

Coking coal stock at Indian ports inched up by 3% m-o-m to 4.69 mnt in the last week of July. The increase in stocks can also be attributed to production cuts of 15-20% announced by Indian steel majors amid poor export and domestic demand.

Country-wise imports

Qty in mnt

India's coking coal imports from Australia registered a 19% m-o-m drop in July at 2.94 mnt. Imports from USA, Canada, Indonesia and Mozambique also recorded a fall.

Interestingly, the country's coking coal imports from Russia increased by 6% at 0.18 mnt, as the same is being sold at discounted rates against Australian and other-origin coal. Although the spread between Russian and Australian coking coal prices have narrowed down from 30% in June to 12% in July, the former is still cheaper, making Indian mills to opt for Russian coal blend.

Key Importers

Qty in mnt

SAIL imported the highest volumes in July at 1.25 mnt but the volumes were 10% lower compared to previous month. However, the highest decline was seen in imports of JSPL and JSW Steel.

Dhamra Port receives highest quantity

In July, Dhamra Port received the highest volumes at 0.79 mnt, up by 3% m-o-m. Imports via Paradip and Haldia ports decreased by 29% and 19% respectively.

Qty in mnt

Outlook

It is anticipated that India's coking coal imports would start gaining momentum from August as the country's domestic steel demand is expected to improve post monsoon i.e. from October and also steel mills which are shut due to maintenance will resume operations leading to increased requirement of coking coal.