PCI Coal – Shifting Gears with Growing Significance in Indian Industry

The PCI Coal trade has improved significantly in last couple of years, especially due to increasing demand in steel manufacturing industries as it works out to be an easy and cost-effective replacement for coking coal. The steelmakers seem to be experimenting and mitigating to hedge from the risks of highly volatile seaborne coking coal prices. Even though, the blending process requires some additional up gradation of the furnaces, yet it is quite evident with increasing trend of PCI Coal imports that the industry has been relying if not heavily then moderately to seize the benefits in manufacturing process.

The PCI Coal Imports trend shows a significant inclination of Indian industries for its use.While analyzing the recent trends, it has been noticed that the imports have gone up almost four times to 12.71 MnT (Million Tonne) since CY-2015.Also, this must be noted that CY-2019 saw a substantial import as compared to any of the last five years.

As per Infraline’s analysis in last five years, the consignment of PCI Coal has seen major inflow during CY-2019 & CY-2020. During CY-2019, the month of Jan & May have seen major import flow where May-19 represents highest imports of 1.38 MnT compared to January’s 1.33 MnT. Similarly,for CY-2020, only such exception has been noticed with 1.35 MnT during Mar-20. Also, it is notable that during CY-2020 imports have reduced compared to previous year.

An average decrease of 18% has been seen in CY-2020 (up to Jun-20) compared to last year during same duration with an only exception of Mar-20, as highlighted in charts, where an increase of 19% has been noticed as compared to last year with 1.35 MnT. However, the decline in May & June’20 has been signaling lower imports of coal during current year. Assuming an average of 18% decrease in coming months, the imports are still expected to reach 10.4 MnT. Even though this is less than last year’s actual imports of PCI Coal, the reality is practically even during lockdown of

With major players including TATA group companies, JSW Steels, SAIL, ESSAR etc. being the highest importers of PCI Coal. This shows a major interest of Indian steel makers for PCI coalin 2019 while Australia and Russia being the two major countries of interest here.Almost 8.8 MnT of PCI Coal was imported from Australia while 3.5 MnT was imported through Russia.Most of the coal was imported through Paradip and Dhamra Port where latter’s participation has been increasingly noticeable since CY-2018.

Year-wise highlights of trends of PCI Coal imports are given below for reference:

Here are some key highlights related to PCI Coal imports by various countries:

During CY-15 to 20, Australia and Russia stand as Major PCI Coal Importing Countries, totaling a share of 97%.
Australia alone fulfills around 74% (i.e. 27.60 MnT) of PCI Coal requirement of Indian Steel Industry predominantly.
Since 2018, preference for Australian and Russian coal has increased significantly among Indian Steel Industry Users.
Russia contributes to 23% (i.e. around 8.5 MnT) of PCI coal requirement.
Other countries such as Canada, Latvia, South Africa and China have a share of less than 1 MnT.
Paradip, Dhamra, Kolkata (with Haldia), Marmagoa and Gangavaram are major ports where Australian Coal is transported through.
Out of 38.5MnT imports in last 5 years, approximately 30MnTwas imported through six major ports.

PCI Coal – Shifting Gears with Growing Significance in Indian Industry

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