India buys more US thermal coal as expensive petcoke loses favour

• Indian industries replacing costly petcoke with US high-CV coal
  
  
• High prices, supply disruptions render petcoke market 'non-tradable'
  
  

The Indian market for high-calorific value US coal is experiencing a significant structural shift, as cement manufacturers and industrial buyers accelerate their pivot away from expensive petroleum coke. Vessel manifests and port stock data reveal a coordinated build-up of US coal inventories across both retail and industrial segments, with over 2.5 million tonnes (mnt) currently floating toward Indian ports.

Market surveys indicate a subdued pricing environment for US thermal coal, with offers remaining largely stable amid limited demand urgency. However, the volume story shows a different picture: Indian buyers are quietly but decisively rebuilding their fuel mix around competitively priced US coal as petcoke becomes increasingly unaffordable.

Petcoke displacement driver

The surge in US coal imports is directly linked to the sharp rise in petcoke prices and ongoing supply disruptions. Delivered petcoke offers to India remain substantially elevated in the range of $168-170/t, while bids lag significantly lower near $155/t. The spread between bids and offers has widened to the point where deals are not being concluded, with buyers describing the market as "non-tradable."

Petcoke supply remains constrained by multiple factors. Ongoing hostilities have effectively removed Middle Eastern coke from the market, with major refining complexes either reducing output or sustaining damage. A fire at a major Gulf coast refinery has delayed coke shipments from April to May, while a fire at a new Mexican refinery may have damaged its coking unit, threatening recent gains in export supply.

As a result, petcoke imports to India have fallen dramatically to just over 100,000 t in February compared to over 1 mnt a year earlier. This supply gap is being filled by US coal.

Retail sector: Steady lifting and growing stockpiles

The retail segment - comprising traders and smaller end-users - has maintained consistent off-take of US coal. Current retail port stocks as of 13 April stood at approximately 405,000 t. Weekly lifting volumes in the retail segment during the week ended 13 April reached over 103,000 t.

Market participants report that portside offers for US thermal coal are currently circulating in a stable range between INR 14,500 and INR 15,600/t, with limited demand keeping prices steady. One trader noted that US thermal rates have softened as vessels continue to arrive. Another observed that "there was over-speculation" and that "previous levels were completely hypothetical, creating a non-tradable market."

Industrial sector: Massive inbound volumes

The industrial segment - direct consumers including cement manufacturers and other heavy industries - has secured significantly larger volumes of US coal. Over 1.4 mnt are currently floating toward Indian ports in numerous vessels.

Major cement producers feature prominently among the receivers, confirming the industrial shift away from petcoke. Multiple shipments of substantial tonnage are scheduled to arrive at various discharge ports along India's west and east coasts through May and early June.

Supply pipeline: Vessels at load ports

Further supply is en route from US East Coast loading ports. Vessel line-ups at major load ports show numerous additional US coal vessels scheduled for loading through late April, with multiple large shipments exceeding 80,000 deadweight tonnes, all flagged for Indian buyers.

Market outlook: Sustained shift

The vessel manifests and port stock data tell a clear story: Indian industry is not merely testing the US coal market - it is committing to it. With over 2.5 mnt set to arrive, and major cement producers among the primary receivers, the shift appears structural rather than opportunistic.

The retail sector maintains comfortable inventories of approximately 405,000 t at key ports, while industrial buyers await over 1.4 mnt of additional supply.

For the petcoke market to regain lost ground, prices would need to correct significantly below current levels, and supply disruptions would need to be resolved. Neither appears imminent. Until then, US high-calorific value coal appears positioned to capture an expanding share of India's industrial fuel mix.

The vessels keep sailing, the stocks keep building, and Indian industry continues to vote with its purchasing decisions. For now, the momentum firmly favors US high-calorific value coal over petcoke.