India’s Russian coal imports could be highest in more than two years in March

Russia, typically India’s sixth-largest supplier of coking coal and thermal coal, could start offering more competitive prices to Chinese and Indian buyers as European and other customers shun Russia over sanctions, officials said. traders, adding that trade could also be boosted by a ruble-rupee trading arrangement.

About 870,000 tons of Russian coal have already been delivered or are expected to be delivered to Indian shores until March 20, the highest since April 2020, according to Indian consultancy Coalmint.

The number would be higher if more coal were loaded in Russian ports since mid-February, as it usually takes about a month for Russian ships to deliver to India, said Aditi Tiwari, coal market manager at Coalmint.

“Indian buyers have taken a step back after the SWIFT ban and Russia sanctions. They are looking for alternatives from Australia and the US,” Tiwari said.

A number of Russian banks have been cut off from the SWIFT secure messaging system that facilitates cross-border payments.

But at least three coal-carrying ships set sail for India from Russian ports after Russia launched its invasion of Ukraine on February 24, according to ship tracking data from Refinitiv and a source. ‘industry.

“Indian buyers continue to bring coal from Russia to market here but are starting to find it increasingly difficult as banks are unwilling to open letters of credit,” the industry source said. .

“Long-term bankable customers receive coal on a trust basis, while relatively new customers are unable to source coal due to funding issues,” the source said.

VR Sharma, managing director of Jindal Steel and Power Ltd (JSPL), said importing from Russia would be difficult unless there was a “rupee-rouble” trade.

India is exploring ways to set up a rupee payment mechanism with Russia to ease the blow to New Delhi from Western sanctions imposed on Russia.

“If the rupee-ruble trade is approved, then we can get affordable and cheaper coal from Russia,” Sharma told Reuters.

JSPL is among the importers from Russia in March, along with Tata Steel, Kalyani Steels and JSW Steel. JSW declined to comment, while Kalyani and Tata Steel did not respond to requests for comment from Reuters.

A trader from Sibuglemet, one of Russia’s top exporters, said the company and its competitors were still supplying coal to India, but said “some problems are emerging”.

“Tomorrow, if they put in place strict controls on payments, trade would be organized through buyers from other countries,” he said.

(By Sudarshan Varadhan; Editing by Edmund Blair)

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