Shifting tides in India’s coal imports: Russian decline, U.S. rise

According to Bigmint’s data, Russian coal exports to India fell by 22.4% year-over-year to 6.76 million metric tons.

Recent data from coal consultancy Bigmint reveals a notable decline in Russian coal shipments juxtaposed with an increase in U.S. exports. This shift observed over the three months ending in May, highlights the dynamic nature of global energy markets and the complex factors influencing international trade.

According to Bigmint’s data, Russian coal exports to India fell by 22.4% year-over-year to 6.76 million metric tons. Concurrently, U.S. coal exports to India saw a 14.4% increase, reaching 6.68 million tons. The most dramatic change was observed in thermal coal, primarily used for power generation, with Russian shipments plummeting by 67%.

Contrary to initial speculation, industry experts attribute this shift more to economic factors than to Western sanctions on Russia. K.C. Gandhi, Joint President of Materials Management at Shree Cement, emphasized that the main issue is thermal coal prices and not the sanctions. Logistics costs have gone up in Russia, which is why they are not able to compete.

The changing import patterns have led to significant market share adjustments. Russia’s share in India’s thermal coal imports dropped from 8.8% to 3.2%, while the U.S. increased its share from 6.7% to 9.2%. Interestingly, Russia managed to increase its share in India’s coking coal market from 10.9% to 13.9%, indicating a nuanced picture across different coal types.

Riya Vyas, senior analyst at iEnergy Natural Resources Limited, suggests that this trend may benefit other thermal coal exporters in the short term, as they capitalize on Russia’s pricing constraints.

This shift in India’s coal import patterns reflects the intricate interplay of global energy markets, geopolitical tensions, and economic factors. As India, the world’s second-largest coal importer, adjusts its sourcing strategies, the repercussions are likely to be felt across the global energy sector.