India’s domestic demand for anthracite coal has been steadily improving over the past few months with certain buyers having imported substantial volumes of seaborne material.
Until last year, however, the anthracite coal market in India had been lackluster for a long time because of inconspicuous consumption by the country’s end-user markets.
Accordingly, Indian anthracite imports had remained at significantly low levels due to the consistent prevalence of sluggish demand, primarily attributable to alternate cheaper coal types being used across industries.
Notably, high grade (HG) and ultra high grade (UHG) anthracite is employed in steelmaking as a cost-efficient substitute for coke in processes such as sintering and pelletizing, as well as pulverised coal injection (PCI) and direct injection into blast furnaces.
Import shipment volumes surge 37% m-o-m in May’21
Anthracite coal imports into India rose by 36.6% month-on-month to 189,741 tonnes (t) in May’21 compared with 138,855 t in Apr’21 — marking the highest monthly import shipment volume since Nov’20.
In the Jan-May period of the current year, India’s aggregate imports also increased by 18.7% on a quantity basis year-on-year to reach 565,783 t, as against 476,566 t of imports seen during first five months of last year.
Nevertheless, the surge in the country’s import volumes last month can be explained as a seasonal one-off effect; happening primarily on account of industrial traders having actively ramped up their coal purchases in order to stock the raw material ahead of the monsoons.
Even then, India has only imported a meagre quantity of 11,550 t of the coal so far this month, as per vessel lineup data compiled by CoalMint. This Russian shipment was received at Visakhapatnam Port in Andhra Pradesh on the east coast of India.
On the pricing front, the current offer price for anthracite fines is assessed at around $165/t CNF India, up by $5/t from a week earlier.
Anthracite coal prices are expected to increase further because of rising international spot prices of alternative coal types used as steelmaking raw materials – coking coal, metallurgical coke, breeze coke et al.
Furthermore, ocean freight rates have risen sharply over the recent past, and are quite likely to maintain current levels or rise higher with global crude oil prices shooting up.