Russia may start offering more competitive prices to Chinese and Indian buyers as European and other customers turn down Russia due to sanctions
Russia may start offering more competitive prices to Chinese and Indian buyers as European and other customers turn down Russia due to sanctions
India’s coal imports from Russia in March could be the highest in more than two years, data from research advisories showed, as Indian buyers continue to buy fuel from a market now isolated from sanctions. has fallen.
Data from consultancy Kepler shows vessels carrying at least 1.06 million tonnes of coking coal, which is primarily used for steelmaking, and thermal coal, which is primarily used for power generation , are set to deliver fuel to Indian ports in March, the highest since January 2020.
Russia, usually India’s sixth-largest supplier of coking and thermal coal, may start offering more competitive prices to Chinese and Indian buyers as European and other customers turn down Russia due to sanctions, traders said. A boost can also be made from a ruble. Rupee trading system.
Indian consultancy Coalmint says around 870,000 tonnes of Russian coal has already been delivered or is expected to reach Indian shores by March 20, the highest since April 2020.
Aditi Tiwari, head of coal markets at Colmint, said the number will be higher if more coal is loaded at Russian ports from mid-February, as it usually takes about a month for Russian ships to reach India.
“Indian buyers have backtracked after SWIFT ban and sanctions on Russia. They are looking for alternatives from Australia and US”
Several Russian banks have been disconnected from the SWIFT secure messaging system that facilitates cross-border payments.
But after Russia launched an invasion of Ukraine on February 24, at least three ships carrying coal from Russian ports left for India, according to Refinitiv vessel tracking data and an industry source.
“Indian buyers are still getting coal from Russia in the market here, but it is starting to get more difficult as banks are not ready to open letters of credit,” the industry source said.
“Bankable long-term customers are being assigned coal on confidence basis, while relatively new customers are not able to procure coal due to financing issues,” the source said.
VR Sharma, managing director of Jindal Steel and Power Ltd (JSPL), said imports from Russia would be difficult unless there was a “rupee-ruble” trade.
India is exploring ways to establish a one-rupee payment mechanism with Russia to cushion New Delhi’s blow from Western sanctions imposed on Russia.
“If the rupee-ruble trade is approved, we can get coal from Russia at cheaper and cheaper prices,” Mr Sharma told Reuters.
JSPL was among the importers from Russia along with Tata Steel, Kalyani Steels and JSW Steel in March. JSW declined to comment, while Kalyani and Tata Steel did not respond to Reuters requests for comment.
A trader at Sibglemet, one of Russia’s major exporters, said the firm and its competitors continued to supply coal to India, but said “some issues are emerging.”
“Tomorrow, trade will be conducted through buyers in other countries if they have tighter controls on payments,” he said.