By Sudarshan Varadhan and Aftab Ahmed
NEW DELHI (Reuters) – India’s thermal coal imports from Russia are expected to fall for the first time in four months in September, two research consultancies said, which could result in lower revenues for Moscow at a time it is mobilizing more troops to fight in Ukraine. .
Indian consultancy Coalmint expects September thermal coal imports from Russia to decline 30% from August to 1.4m tonnes, it said in a note to clients.
London-based analyst firm DBX Commodities estimates Indian shipments of fuel for power generation will fall to 1.5 million tonnes this month from 1.9 million tonnes in August, Chief Executive Alexandre Claude on Thursday.
Energy exports to India and China have been crucial revenue sources for the sanctions that hit Russia, but they have also helped close supply gaps and cap rising global fuel prices.
CHART: Russian Coal Supply to India Increases https://graphics.reuters.com/INDIA-CHINA/COAL-IMPORTS/dwvkrxqknpm/chart.png
Russian President Vladimir Putin on Wednesday called up 300,000 reservists to fight in Ukraine, a major escalation and the first such mobilization since World War II, which would require greater spending.
The value of India’s coal imports from Russia since troops entered Ukraine on February 24 rose to about $2.4 billion as of Wednesday, a source who requested anonymity said, citing non-public data from the Indian government. This is a four-fold increase compared to shipments during the same period last year.
Traders and analysts say logistical problems have resulted in lower September imports by India from Russia. Russia’s coal shipments rose in July and August despite a decline in overall Indian imports of the fuel, making Russia India’s third largest supplier of coal.
A longer waiting period for ships, increased traffic congestion in the Baltic region due to Europe’s struggle for energy supplies and difficulties in obtaining insurance resulted in lower Indian imports from Russia, Coalmint said.
The sanctions have cut many European countries off from supplying fuels for power generation from Russia, the continent’s top supplier, sparking a scramble for Europe’s coal, natural gas and electricity amid record prices.
“India’s coal imports from Russia are likely to be in a narrow range in the coming months and vessel availability is likely to be an issue with the start of winter inventory replenishment by several countries, from October,” Coalmint said in the note.
DBX expects India’s total thermal coal imports to fall to about 13m tonnes from 15m tonnes in August, Claude said.
“Thermal coal imports (generally from India) have been declining since June when the heat wave started to recede and the economy started to falter,” he said.
(Reporting by Sudarshan Varadhan and Aftab Ahmed; Editing by Richard Chang)
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