According to data from coal consultancy Bigmint, Indian imports of Russian coal have declined over the three-month period ending in May, while U.S. shipments have risen. Traders attribute this to Russian coal supplies becoming less competitive.
Bigmint’s data shows that Russia’s exports of all types of coal to India fell 22.4% year-on-year to 6.76 million metric tons during the period. In contrast, U.S. exports to India rose 14.4% to 6.68 million tons.
The decline in Indian imports of Russian coal was driven by a 67% plunge in shipments of thermal coal, which is primarily used for power generation. However, purchases of steelmaking grades such as coking coal, anthracite, and pulverized coal injection (PCI) coal rose during the same period.
India is Russia’s second-largest coal market after China, and the decrease follows fresh western sanctions on Russia due to the war in Ukraine. However, buyers downplayed the impact of sanctions, stating that Russian thermal coal has become less attractive without lower discounts amid a drop in global prices.
“The main issue is thermal coal prices and not the sanctions. Logistics cost has gone up in Russia, that’s why they are not able to compete,” said K.C. Gandhi, Joint President of Materials Management at India’s Shree Cement.
Meanwhile, Russia has been boosting coal supplies to China, with shipments reaching the highest level in eight months in May.
The data also shows that U.S. exports of thermal coal to India in the three-month period rose 21.6% year-on-year to 4.57 million tons, with its share in Indian imports increasing to 9.2% from 6.7%. However, the U.S. share in India’s coking coal imports fell from 16% to 13.5%.
A 44% year-on-year increase in Russia’s coking coal imports to India pushed its share in India’s seaborne market for the steelmaking feed to 13.9% from 10.9%, while its share in India’s thermal coal imports fell to 3.2% from 8.8%.
“Other thermal coal exporting countries may benefit in the short term from Russia’s pricing constraints,” said Riya Vyas, senior analyst at iEnergy Natural Resources Limited, an Indian coal trading firm.