Domestic thermal coal supplies to Indian cement makers rose sharply in February, both year on year and month on month, as producers expanded their coal consumption to benefit from its cost advantage amid a surge in seaborne petroleum coke and coal prices.
Cement makers received 1.36mn t of domestic coal in February, up by about 85pc from a year earlier, coal ministry data show. Receipts rose by almost 29pc on the year to 9.6mn t in April 2025-February 2026 — the first eleven months of India's April 2025-March 2026 fiscal year.
Receipts rose by 43pc from 950,000t in January, even though the month had fewer working days. Domestic coal prices are regulated and largely insulated from fluctuations in the seaborne market. Meanwhile, delivered prices for seaborne coke rose sharply, prompting producers to increase their use of domestic coal. The Argus-assessed index for 6.5pc-sulphur coke delivered India averaged $124.25/t in February, up by $6.63/t from January, primarily due to an increase in fob prices.
The cfr India 6.5pc coke market was last assessed at $145/t on 11 March. Cfr offers of US high-sulphur coke jumped sharply after the US-Iran war disrupted supplies of Saudi coke and pushed up freight rates. Trades for April-loading high-sulphur US coke on Supramax vessels have been scarce so far, but offers have been indicated at more than $150/t for India's west coast.
Offers of US Northern Appalachian NAR 6,900 kcal/kg coal — a preferred alternative to coke — have also been scarce, but a Panamax cargo likely sold to an Indian cement maker for end-of-April loading at $145/t cfr — although the port of delivery was not known and this trade could not be immediately verified.
Higher prices and reduced availability could push Indian cement makers to continue to look for cheaper fuel alternatives, including domestic coal. The removal of a 400 rupees/t ($4.33/t) levy on coal from September has further encouraged coal use. And higher domestic coal availability has enabled cement plants to increase coal's share in their fuel mix, while reducing imports. Plants can switch between coal and coke depending on cost.
Indian cement makers imported just 382,300t of coke in January, down by 55pc from a year earlier and by 51pc from December, according to shipbroker Interocean. Firm cfr prices and offers of seaborne coke have prompted many cement plants to increase their domestic coal intake, although producers still need to blend coke in certain ratios to use local coal effectively.
"We have started using a good amount of domestic coal in our plants and this has helped us offset the impact of the rise in coke prices," leading cement maker Nuvoco Vistas managing director Jayakumar Krishnaswamy told investors in January. Nuvoco Vistas cut its coke use to 41pc in October-December from 48pc in the corresponding quarter of 2024.
Indian coal supplies to non-power consumers, such as cement plants and steel mills, increased in the first eleven months of the 2025-26 fiscal year, because of higher availability and lower demand from coal-fired power plants.
Higher domestic coal supply to cement plants and a partial replacement of coke use limited India's overall appetite for imported coke last year. Indian cement makers imported 10.67mn t of coke from origins including the US and Saudi Arabia in 2025, down slightly from 10.83mn t a year earlier, according Interocean.
