No matter some sanctions by the West on Russia following its invasion of Ukraine and India's strained relationship with China, Asia's third largest economy is growing increasingly dependent on these foreign countries for supply of coal and met coke.
India's coal import rose 10% on-month to 2.03 million tonnes (mnt) in July from Russia, which toppled United States and others to become the third-largest coal supplier to India, as per vessel line-up data compiled by CoalMint.
Russia has typically been the sixth-largest coal supplier to India, behind Indonesia, South Africa, Australia, the U.S., and Mozambique and Colombia alternately featuring in the top five list.
"Following the sanctions imposed by European countries, Russia has been struggling to sell its coal and is offering hefty discounts. This comes as a boon for the Indian buyers as they increase procurement of Russian coal at a time when there is shortage of domestic coal in the country," CoalMint said.
Steep discounts offered by Russian suppliers to Indian consumers in recent months have also incentivized thermal coal imports, which is primarily used in power generation. There has also been a bump up in such discounted imports as global prices moved to near-record highs due to western sanctions choking traditional trade.
Thermal coal imports from Russia jumped 55% on-month in July and soared 500% from a year earlier.
Power and cement industries accounted for the majority of imports, while UltraTech Cement NSE -0.22 % was the major importer of thermal coal at 0.17 mnt, followed by JSW Steel NSE 1.77 %, according to CoalMint.
Since the start of the Russian invasion of Ukraine on February 24, Western countries have taken a salvo of sanctions against Russia intended to strangle it financially and economically.
However, India has seen a five-fold increase in imports from Russia to over $15 billion ever since Russia invaded Ukraine, according to Reuters. In fact, India's imports from Russia jumped nearly 80% in the last fiscal year ending Mar. 31, 2022, in contrast to a 22.7% fall in fiscal 2021 and 31.9% plunge in fiscal 2019, according to commerce ministry data.
Meanwhile, India was the top importer of Chinese met coke in the first half of 2022, fetching China an average income of $553 per tonne.
China exported 650,000 tonnes of met coke to India in January to June, CoalMint said citing customs data. Sluggish domestic demand in China, higher Australian coking coal prices, lack of anti-dumping duty on Chinese coke and India's increased crude steel production led to the increased import.
However, China's met coke exports in the second half of this year may decline as global coking coal prices plunged. Australian coking coal prices have dipped by 60% since March. Indian steel demand has also turned sluggish and a subdued Indian steel demand outlook is likely to weigh on met coke requirements.
Source Name:-Economic Times