Shipments of coking coal from the United States and Canada rose to a sixth of all Indian imports of the fuel during the year ended March, 2019, as steel makers in the coal guzzling country look to cut their dependence on Australia.
Australia’s share in India’s coking coal market fell to 71 per cent, or 36.91 million tonnes, during the year ended March, 2019, from about 88 per cent three years ago, India coal ministry data reviewed by Reuters showed. The United States and Canada had a 5.6-per-cent share of the market three years ago.
Regular interruptions in India’s main supplier over the past few years, including a flood in a major coal-producing region in February and a cyclone that tore into Queensland in 2017, have caused worries about major supply disruptions in India.
Over all, Indian coking coal imports rose 10.3 per cent to 51.84 milion tonnes, while imports of thermal coal – mostly used by utilities – rose 13.72 per cent during 2018-19.
Higher Indian coal imports are a boon for international miners such as Indonesia’s Adaro Energy, Australia’s Whitehaven Coal, U.S. coal miner Peabody Energy Corp. and global commodity merchants such as Glencore PLC.
India expects its coking coal demand to more than double in 10 years as the country plans to increase its crude steel production to 300 million tonnes by 2030 from current annual production of 132 million tonnes.
Indian steel makers import the bulk of their coking coal needs due to scarce domestic production.
The country imported 4.29 million tonnes of coking coal from Canada during 2018-19, accounting for 8.27 per cent of overall India-bound shipments of 51.84 million tonnes.
Coking coal imports from the United States were 4.13 million tonnes, or 8 per cent of all shipments to India of the fuel.
Indonesia remained the top supplier of thermal coal in 2018-19, accounting for three-fifths, or 111.6 million tonnes. Imports from South Africa amounted to 31.15 million tonnes, or less than a sixth of all thermal coal imports.
Imports of thermal coal from the United States rose by 24 per cent to 10.84 million tonnes, the largest gain by a country in percentage terms. Indonesian coal imports rose 18 per cent, while imports from South Africa fell 19 per cent during the year.
Rate of growth of thermal coal imports from countries such as Russia and Australia were largely in line with an overall surge in imports, while coal imports from Mozambique outpaced overall growth, up 37.4 per cent to 4.85 million tonnes.
Australian thermal coal exports to India could rise once Adani Enterprises’ Carmichael mine starts exporting, which the company expects to do in two years.