Indian cement sector turns to US high-sulphur coal

Shree Cement and Ultratech have taken one cargo of US high-sulphur coal, with others set to follow suit, as the Indian cement sector seeks a cheaper alternative to the increasingly scarce petcoke.

India's coal imports are set to grow rapidly to over 100Mt of thermal coal this year, most of it from Indonesia and South Africa destined for power generators. The cement sector is a smaller but significant consumer of imports.

Some Indian end-users are likely to turn to the very high-sulphur Illinois Basin coals to take advantage of their lower prices and greater supply than petroleum coke.

According to traders, Illinois Basin thermal coal of 3.5% sulphur, with a similar energy value, has been trading at a discount of USD25/t to European delivered prices or roughly USD70/t FOB.

U.S. petcoke with 6.5% sulphur and an energy content of around 7,000kc/kg was sold in February at USD120/t CIF India to a South Indian cement maker and prices have been stable since then.