India's monthly coal imports nosedive to its lowest in Jun'20

India's coal import shipments have reached a record low in Jun'20 at 10 mn t since 2013 when CoalMint started maintaining vessel-line-up data. On m-o-m basis this is down by 18% and on y-o-y basis it is lower by 29%.

Non-coking coal imports

The country is a major importer of non-coking coal and its import shipments have fallen by 14% m-o-m in Jun'20 at 7.03 mn t.

Domestic availability impacts Indonesian coal imports

While Indonesia continued to remain the top thermal coal exporter to India in Jun'20, the imports from the country have fallen by 12% m-o-m in Jun'20 at 4.01 mn t.

Indonesian coal is majorly used in the power sector and the increased availability of domestic coal in India attributed to this plunge.

This can be noticed from the fact that thermal coal imports from power sector have plunged by 37% m-o-m in Jun'20 and stood at 2.96 mn t. Whereas, India's domestic power consumption in June rose by 4% m-o-m at 106.5 BU (Billion units).

The average coal stock at Indian power plants in Jun'20 was around 47.2 mn t (sufficient for 27 days) against 26.6 mn t in June last year, CEA data reveals.

Drop in coal imports from other countries

Indian coal import shipments from U.S. dropped by 83% m-o-m basis at 0.17 mn t. The thermal coal shipments from U.S. which is used as a cleaner substitute for pet coke in Indian cement sector take around 40 days to reach India.

As there was uncertainty about the resumption of construction activities especially in urban areas, importers avoided long-term bookings of U.S. coal.

The coal imports from other countries such as Russia, Australia and Columbia also dropped m-o-m basis in June amid limited domestic demand and also because these countries are back to focusing on their traditional markets in Europe and East Asia, post lifting and easing of lockdown restrictions.

Coal imports from S. Africa up m-o-m, down on yearly basis

Coal import shipments from South Africa, majorly used in sponge and cement sector has shown a surge m-o-m basis in Jun'20 at 2.38 mn t whereas on yearly basis the same have registered a fall of 41% against Jun'19.

Coking coal imports dwindle

India's coking coal imports have contracted by a whopping 44.3% year-on-year in Jun'20, as against 5.33 mn t in Jun'19, as per latest vessel lineup data.

The Indian demand for steelmaking raw materials has been recovering slowly as crude steel production has gradually resumed over the past month in line with the graded opening up of lockdown restrictions. But there is not much room for improvement as most steelmakers are still consuming their existing long-term contract cargoes of coking coal.

Outlook

The ongoing strike in Coal India that has resulted in an average daily production hit of 56% in just three days 2-5 Jul'20. Despite this, the outlook for Indian coal imports appears to be weak amid:

Enough coal stock of about 46.1 mn t (sufficient for 27 days) as on 2 Jul'20, available at the domestic thermal plants.

The sluggish pace of construction activities during monsoon

Persistent labor scarcity at plants due to increasing COVID cases

Tepid steel demand in the domestic market which would recover only after the monsoon season ends in late September at the earliest.