India’s purchases of Russian coal have skyrocketed in recent weeks amid sanctions imposed by several countries on Moscow. The soaring volume of Indian coal purchases came as traders offered discounts of up to 30 percent, according to two trading sources and data reviewed by Reuters.
Russia, which faces heavy Western sanctions over its invasion of Ukraine, warned the European Union in April of imposing sweeping sanctions on coal. Moscow said the sanctions would backfire as the commodity would be diverted to other markets.
India has refrained from condemning Russia, with which it has long had political and security ties. But New Delhi continues to call for an end to the violence in Ukraine. He defended his continued buying of Russian goods as part of efforts to diversify supply and argued a sudden halt would push up world commodity prices and hurt consumers.
US officials have told India there is no ban on energy imports from Russia, but they don’t want to see a “rapid acceleration.”
But as European importers avoided trading with Moscow, Indian buyers bought significant volumes of Russian coal despite the high shipping costs.
Purchases of coal and related products jumped more than sixfold in the 20 days to Wednesday from the same period a year earlier to $331.17 million, according to unpublished Indian government data reviewed by Reuters.
Indian mills also buy cheap Russian oil which is shunned by Western countries. The value of India’s oil trade with Russia in the 20 days to Wednesday jumped more than 31 -fold to $ 2.22 billion, according to data.
Russian coal traders such as Cyprus-based Suek AG, KTK and Carbo One located in a number of places, including Dubai and Singapore, offered 25-30 percent discounts, triggering bulk purchases of Russian thermal coal by traders supplying utilities and cement makers. , say a number of sources.
The European Union has banned new coal contracts and by mid-August will force its member states to terminate existing contracts.
Bulk purchases of Russian coal in India will continue, with June imports expected to be the highest in at least 7.5 years, according to ship tracking data from Refinitiv Eikon. [ah]