(Opinions expressed here are those of the author, a columnist for Reuters.)
LAUNCESTON, Australia (Reuters) – India’s coal imports have risen in recent months to near pre-pandemic levels, but the market share of cargo supplying countries has shifted, mainly due to China’s dispute with Australia.
India imported 17.56 million tonnes of thermal and coking coal in January, according to ship and port tracking data compiled by Refinitiv.
This was down slightly from December’s 17.74 million tonnes and 18.02 million in October, but slightly above November’s 17.54 million.
Overall, the past four months have shown that India’s desire to import coal has returned, having taken a hit in the middle of last year when the government locked down the South Asian country as part of efforts to combat the spread of the new coronavirus.
India’s imports in January were also only 2.6% lower than 18.02 million tonnes from the same month in 2020, while December was 2.1% below December 2019 levels.
The economic blow caused by the lockdown, imposed last March, began to show in coal imports in May, when only 10.3 million tonnes were released, which fell further to 8.81 million in June, the lowest since Refinitiv. started tracking in January. 2015.
However, in October, imports were almost at pre-pandemic levels, as demand for electricity rose as the economy restarted and demand for steel also recovered as construction and infrastructure spending recovered.
India is the second largest coal importer in the world after China, and China’s influence is felt in the Indian coal market.
China has imposed an effective ban on imports from Australia, the world’s largest exporter of coking coal used to make steel, and the second-largest shipper of thermal coal used in power generation.
China is unhappy with Australia over a range of issues, including Australia’s call for an international investigation into the origins of the coronavirus and China’s response to the initial outbreak.
This has led to a series of trade actions by China against Australia, including bans or tariffs on coal, barley, meat, wine and tourism, among other goods.
Ironically, China is spending more than ever on imports from Australia, given its reliance on iron ore and liquefied natural gas, two commodities that demand high prices and Australia is the world’s biggest exporter.
But while Australian coal exporters have closed out of China, they have made inroads in India, with imports from Australia hitting a record high of 6.75 million tonnes in January, according to Refinitiv.
This is up from 6.32 million tonnes in December, 5.06 million in November and 5.49 million in October.
Cumulatively, the past four months have been the strongest for Australian coal imports from India since Refinitiv began its assessment in January 2015.
January imports were also up 81% from 3.72 million tonnes recorded in the same month in 2020, and about 301% above the 2020 low of 1.68 million in June.
India traditionally buys coking coal from Australia given its limited domestic reserves with these higher energy levels, but in recent months India has started buying thermal coal in increasing volumes.
Australian thermal coal exports to India totaled 1.87 million tonnes in December 2020, up 450% from 340,000 tonnes in December 2019, according to data from commodity price reporting agency Argus.
INDONESIA TOP SPOT IS LOST
While Australia is gaining market share in India, the loser is Indonesia, which has given up its status as the biggest supplier to India.
India imported 5.42 million tonnes from Indonesia in January, down from 5.74 million in December, 5.82 million in November and 6.75 million in October.
Imports from Indonesia have recovered from a pandemic lows of 3.51 million tonnes in June, but are still well below historical levels, with January 2020 being 26.5% below 7.37 million tonnes from the same month a year earlier .
However, Indonesian exporters may not be overly concerned as they have largely filled the void in China caused by restrictions on imports from Australia.
Another factor to note is that India is effectively importing more energy in the form of coal, given that Australia usually supplies more energy coal than Indonesia.
This means that Indian coal imports are more or less stable in terms of volume, but the more cargo is sourced from Australia, the total amount of energy imported will likely increase.
It is also likely that what the market is going through is more of a permanent change in dynamics, as there is no sign that China will relax its ban on Australian coal, and even if it does, trade relations could break down to the point where it is. hard to fix.
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