New Delhi April 19 2022: India is looking to procure Russian origin coal, leveraging the steep discounts offered by the latter compared to the Australian and the South African origin material amid a decline in stockpiles at domestic power plants, market sources told S&P Global Commodity Insights April 18.
Sources said that India bought 5,500 kcal/kg NAR coal from Russia at $160-$165/mt CFR India for an April-loading Capesize ship in the week ended April 16, adding that the freight between Russia and West coast India was at around $35-$36/mt.
This implies a deep discount to the price that Indian buyers are offered compared to coal from other origins. Traders said that the 5,500 kcal/kg NAR Russian coal was generally being offered at around $60-$65/mt discount to the Newcastle 5,500 kcal/kg NAR coal.
According to FOB price indications from market sources, Russian 5,500 kcal/kg NAR coal was heard at around $10/mt discount to Australian 5,500 kcal/kg NAR at the end of 2021.
The Newcastle 5,500 kcal/kg NAR coal with 23% ash was assessed at $195/mt FOB on April 14, while the Richards Bay 5,500 kcal/kg NAR coal price was assessed at $272.65/mt on the same day, according to data by S&P Global.
Indian traders have been looking for lucrative offers for Russian coal after Russia offered a discount on coal following sanctions by several countries on Russian coal in the aftermath of its invasion of Ukraine. The EU and Japan announced bans on Russian origin coal in the week ended April 8.
However, discussions on payment mechanism and timing of the payment and deliveries remained sticking points, sources said.
S&P Global assessed the 6,300 kcal/kg GAR Russia Pacific price at $170/mt FOB on April 14.
