SteelMint Events

Tag: Coal Imports

  • India: Sponge iron producers eye alternative Mozambican coal amid tight domestic supply

    India: Sponge iron producers eye alternative Mozambican coal amid tight domestic supply

    At a time when sponge iron manufacturers in India continue to deal with domestic coal shortage, quality issues regarding imported coal, and rampant volatility in prices, a new alternative is likely to emerge in the form of coal shipments from Mozambique.

    Mozambican coal is heard to be of good quality and cost-competitive against South African coal.

    One of India’s leading steel manufacturers, Jindal Steel and Power Ltd. (JSPL) has taken the initiative to experiment with Mozambican VT 1 grade coal (from Vulcan Energy formerly Vale Mozambique), which has shown positive results in sponge iron kilns of 500 TPD (tonnes per day), 350 TPD and 100 TPD capacities, wherein no mixing or blending is required.

    The coal that has already been used has resulted in average consumption of 800 kg/tonne (t) of sponge iron.

    VT 1 grade specifications:

    The advantages of VT 1 grade over South African RB2 (5500 kcal/kg NAR) used for sponge-making are as under:

    The trial data for 100% usage of VT 1 grade coal in different designs of sponge iron kilns are as follows:

    According to market participants, Mozambican coal is likely to gain more significance in the domestic sponge iron industry as Europe’s strong demand continues to keep South African coal prices high.

    Coal sourced from other origins such as Australia and Russia, however, are unlikely to be utilised as a full substitute for South African or Mozambican stocks.

    JSPL has proposed to maintain approximately 300,000 t of Mozambican coal at key ports around the country including Paradeep, Dhamra, Haldia, Kandla, Gandhi Dham, Raigarh, Angul and Ranchi from where sponge iron manufacturers can buy the coal in their local currency.

    This would mitigate the risk of opening LCs, handling bulk imports, inventory management, etc. The proposal has been suggested till the time coal supplies from domestic miner Coal India normalises.

    India’s coal imports from Mozambique

    Major steel and cement companies are the biggest buyers of coal from Mozambique, with the share of thermal coal standing at around 2% and that of coking coal at 1% of India’s total imports in June.

    As per data maintained with CoalMint, the country’s total thermal coal imports from Mozambique was 2 mnt during the first six months of the year, up 109% y-o-y, while coking coal imports stood at 1.3 mnt, up 40% y-o-y.

    To know more about the changing trend of coal usage in the domestic sponge iron industry join us at India Coal Outlook Conference. CoalMint will be hosting the India Coal Outlook Conference on 3-4 August 2022 at The Lalit, New Delhi, to discuss the key issues pertaining to domestic coal production and supply, the government’s objective of controlling imports and domestic supply gap affecting many industries, the need to increase the purchasing power of Indian steel companies in the volatile global coking coal market as well as issues related to decarbonization of the coal value chain.

  • Indian buyers lapping up cheaper Russian coal, imports exceed 2 mn t in June

    Indian buyers lapping up cheaper Russian coal, imports exceed 2 mn t in June

    The Russia-Ukraine conflict that commenced in end-February, 2022 has been altering coal trade dynamics in more ways than one. India, whose coal imports from Russia rarely touched the 1 million tonne (mnt) mark in the past, imported about 2.02 mnt of coal from Russia in June.

    The reason, of course, was that Russian coal was available at discounted rates to India buyers after the USA, EU and Asian countries such as South Korea, Japan and Taiwan slapped sanctions on Russia.

    Of all types of coal coming in from Russia in June, thermal coal had the highest share at 1.03 mnt, followed by PCI (0.45 mnt), coking coal (0.28 mnt) and anthracite at 0.25 mnt.

    Thermal coal

    An analysis of the buying pattern of thermal coal shows that the power and cement sectors accounted for the majority of imports. India hardly imported thermal coal from Russia previously as evidenced by data gathered in previous years, with the highest imports standing at 0.87 mnt in January, 2020.

    According to market participants, Russian coal is suitable for the cement and power sectors in India given its high GCV and low sulphur content. With thermal coal prices from Indonesia, Australia and South Africa trending at very high levels, cheaper Russian coal provides cost benefit to Indian users.

    Coking coal

    Coking coal imports of 0.28 mnt, however, are similar to pre-war levels. In fact, looking at past data, India imported very little Russian coal. In 2021, the country’s monthly average Russian coal imports stood at 0.12 mnt. Top buyers of Russian coal were JSW Steel and Visa Steel.

    Australian coking coal prices, trending at an average of $400/t on FOB basis in June, have pushed a select few Indian steel mills to opt for Russian coal, which is available at just half the price compared to Australian material. However, Indian steel major Tata Steel has shunned imports from Russia due to the war and thus no vessels for the company arrived from that country in June.

    PCI coal

    India has been a regular buyer of Russian PCI coal and its monthly average in 2021 stood at 0.22 mnt, whereas in January-May 2022 imports stood at 0.46 mnt; about 0.45 mnt of PCI is expected to be imported in June. The top buyer in June is JSW Steel followed by JSL, Rawmet and AM/NS India.

    Anthracite

    Like PCI coal, India imported anthracite coal from Russia in the past but in small quantities, with the monthly average standing at around 0.10-0.12 mnt. But June has recorded the highest imports thus far of 0.21 mnt from Russia amid low prices. Rawmet and Carbon Resources were the top buyers of Russian anthracite coal during the month.

    Outlook

    CoalMint vessel data shows that Russian coal imports will be around 0.52 mnt between 1-12 July. While the next quarter may see a decline in imports due to bearish sentiments in the steel and cement sectors during the monsoon, after the rainy season the share of Russian shipments in India’s total coal imports is likely to rise.

    Will Russian coal imports rise further in H2 2022?

    Learn more from the experts at India Coal Outlook Conference 2022 on 3-4 Aug, at The Lalit, New Delhi (India).

  • Bangladesh Coal Imports Hit All-Time High in Oct’19 – CoalMint

    Bangladesh Coal Imports Hit All-Time High in Oct’19 – CoalMint

    Domestic coal supplies in Bangladesh has been under scrutiny ever since government’s decision to halt coal sales to the local industries was imposed back in Mar’18, which have paved way for subsequent higher coal imports.

    Incidentally, Coal Shipments taken by the country have recorded a mammoth total during Oct’19, thereby helping the country to overtake the total imports registered in CY18.

    Data compiled by CoalMint research indicates that Bangladesh coal imports had attained its highest-ever total since the period from which vessel line-up information for the country was started.

    Coal Intake in Oct’19 was recorded at 1,061,867 MT rising 148% on the month from 428,585 MT in Sep’19.

    Bangladesh had made a slow start post monsoon, wherein after recording nil imports during May-Jul’19 only 10,000 MT coal was bought in the month of Aug’19. However, the exponential monthly rise in Sep’19 was subsequently followed by relatively superior imports in Oct’19, thereby helping the country to overtake the coal volume acquired in CY18 with two months to spare.

    In the first 10 months of CY19 (Jan-Oct’19), Bangladesh coal imports have reached 4,084,475 MT which was 28% higher than 3,220,882 MT noted in the whole period of CY18.

    There has been no sign of immediate resumption of coal supplies asserted by the latest updates provided by Barapukuria Coal Mining Company. Notably, whole 659.75 MT coal produced under its belt was solely delivered to the coal based station operated by Bangladesh Power Development Board (BPDB) as on 13 Nov’19, thus continuing the trend being followed after the ban was imposed.

    Major Coal Suppliers:

    The record import volume in Oct’19 was majorly catered from Indonesia, which remained Bangladesh’s preferred source for coal demand. Supplies from Indonesia rose 46% M-o-M to 624,690 MT in Oct’19, which was also marked 6% higher on the year from 590,450 MT in Oct’18.

    Coal receipt from South Africa also recorded its highest-ever monthly total in Oct’19, noted at 375,216 MT. Apparently, coal shipment from the country was seen after a gap of 6 months.

    Besides, first coal shipment from Mozambique in CY19 was also reported in October, which had supplied the remaining coal volume during the month.

    Country Oct’19 Sep’19 % Change
    Indonesia 624,690 428,585 46%
    South Africa 375,216 – –
    Mozambique 61,961 – –
    Grand Total 1,061,867 428,585 148%

    Source: CoalMint Research
    Quantity in MT

    Although, major portion of the coal imports are utilized by country’s brick manufacturers, coal demand in Bangladesh is expected to be supported by a series of coal-fired power stations slated to come online in the coming years.