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U.S. Coal Exports to India May Increase Following China’s Tariffs

NEW DELHI – Following China’s recent decision to implement a 15% tariff on U.S. coal imports, the United States is poised to increase its coal exports to India. This shift could significantly alter market dynamics, potentially at the expense of suppliers from Australia and Russia, as indicated by multiple industry experts.

The announcement from China’s Finance Ministry last week has prompted U.S. miners to look towards India, currently ranked as the world’s second-largest coal importer, just behind China. Reports from industry insiders suggest that U.S. coal shipments that were initially destined for China are now rerouting to India. According to Vasudev Pamnani, director at I-Energy Natural Resources, “Three U.S. cargoes that were intended for China have already reached India, with approximately ten more cargoes on standby. This influx, particularly of large capesize vessels, may further decrease current market prices.”

Pamnani also expressed concerns regarding the impact of increased U.S. coal imports on Australian suppliers during his address at the Coaltrans India conference. Historically, Australia has been the leading supplier of coking coal to India, responsible for around 80% of imports during the past decade. However, its market share has declined to 62% in 2024 as India diversifies its coal sources, increasingly turning to suppliers in the U.S., Russia, and Mozambique.

While the total volume of U.S. coal exports has traditionally been small in relation to Chinese imports, the value of coking coal—a type primarily utilized by steel manufacturers—has surged, reaching $1.84 billion in 2024, marking a nearly 33% increase.

Malcolm Roberts, Chief Marketing Officer of Peabody Energy, the largest coal producer in the U.S., indicated during a recent analyst call that the new tariffs could lead to greater U.S. coal exports to India and simultaneously prompt an increase in Australian coal shipments to China.

Australia has faced challenges in maintaining its market share within the coking coal sector, particularly after China imposed an unofficial ban on such imports in 2021. In the last decade, Australia once dominated the Chinese market, supplying over two-thirds of coking coal imports. Presently, Mongolia and Russia have emerged as significant exporters to China.

Current data from Chinese customs reveals that in 2024, the U.S. accounted for 9% of coking coal imports, while Australia represented 8%. This shifting landscape suggests that both U.S. and Australian coal exporters may need to adapt quickly to changing trade dynamics to maintain their competitive advantages.

Source
finance.yahoo.com