Coking coal import through Paradip falls by 24%

Coking coal imports through Paradip port declined for the third consecutive month in June as higher prices squeezed demand.

In June, coking coal imports through Paradip port stood at 482,593 tonne, much lower than 632,795 tonne in May. It was 656,295 tonne in April. This marks 24 percent fall in coking coal import between May and June, this year.

Declining coking coal imports may stymie nearly nine million tonne steel production and one million tonne pig iron output in the state and as most steel makers depend on imported coking coal from Australia for fuel, which has lower ash content than locally available coal.

“As many as four pig iron units and a few steel units in the state have stopped production in past couple of months as the higher coking coal prices put pressure on profit margins. Besides, supply crunch from exporting nations also resulted in slower imports,” said an official of a state-based large pig iron maker and coking coal importer.

According to government statistics, steel production growth in the country slowed down to 6.1 per cent in May compared to 9 per cent a year ago. Meanwhile, coking coal prices jumped over 20 percent to $230-250 per tonne in global markets in past five months after a devastating Australian flood cut supplies.

“Lower steel production in May is due to fall in coking coal imports precipitated by rise in the price of the commodity. The coke imports may see a similar trend through the monsoon season till September,” said Sandeep Jain, coal analyst with Karvy Comtrade.

India annually buys about 30-35 million tonne coke while its indigenous production meets only 10 per cent of the requirement.

However, there was significant increase in thermal coal traffic at Paradip port. June coal imports rose by nearly five per cent to 607,790 tonne and coal exports through the port surged to 835,017 tonne, up from 701,711 tonne in May.

Rising coal traffic is in sync with the mushrooming steel, cement and power units in the state. The coal import through Paradip is one of the highest among other major ports.

To meet the rising fuel demand in the country, Coal India Limited (CiL) may import 11 million tonne coal in 2011-12, said the state-run coal producer in a meeting with the coal ministry on June 9.

CIL alone accounts for over 80 per cent of India’s domestic coal production of 530 million tonne. The company’s production is estimated at 452 million tonne in the current financial year, slightly up from 431 million tonne last year.