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Coal prices may stay elevated throughout FY23: ICRA

Russia remains a key supplier of coal in the seaborne market, accounting for 17 and 10 per cent of the international trade in thermal coal and coking coal respectively, as per ICRA’s latest report on coal sector.

March 28, 2022 / 07:21 PM IST
Representative Image

Representative Image

The price of imported coal is poised to rise by 45-55 per cent in the first quarter of FY23 as markets face supply disruption following the Russia-Ukraine conflict and it would severely impact domestic users of imported dry fuel, ICRA said on Monday.

Russia remains a key supplier of coal in the seaborne market, accounting for 17 and 10 per cent of the international trade in thermal coal and coking coal respectively, as per ICRA’s latest report on coal sector.

"Prices of imported coal are poised to spike by 45-55 per cent Q-o-Q in Q1 FY2023 as markets face supply disruption following the Russia-Ukraine conflict. As per latest ICRA note on the coal sector, this will severely impact domestic users of imported coal since, notwithstanding some moderation from the all-time highs of March 2022, coal prices are expected to stay elevated throughout FY2023,” it said.

With SWIFT sanctions imposed on some Russian banks and concerns over counterparty credit risks, buyers are unable to trade with Russian coal suppliers. Moreover, a growing number of western power utilities are also looking to voluntarily place an embargo on Russian coal supplies, which is leading to disruptions in the normal coal trade flows.