Singapore — Indian thermal coal traders are concerned about the labor shortage, triggered by the country's 21-day lockdown to curb a coronavirus pandemic, despite the government's decision to keep ports operational to facilitate movement of essential cargoes, sources said Wednesday.
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Operations at ports rely heavily on migrant laborers, but most of them returned home to their villages after the nationwide lockdown began March 25.
Despite the lockdown, the supply of thermal coal in India was declared as an essential service and officials are to maintain its critical dispatch during the country's lockdown period.
India-based traders, however, bemoaned the existing labor restrictions as one of the key factors impeding port operations.
"Ports are operating due to essential services but the guaranteed discharge rate may be lower due to manpower movement restrictions," said a north India-based trader.
"The key issue here is labor as most workers have left for their homes," another north India-based trader said.
Two sources based in west India held neutral views about the government's lockdown measure and expected clarity to emerge in the coming days.
"Everyone is trying to mitigate their losses now," said one of the sources.
"I had inquiries for half a million mt of thermal coal prior to the lockdown but now I've none," said an India-based trader.
India's lockdown to contain the spread of the coronavirus pandemic and lackluster Chinese seaborne demand are already hampering coal prices. The price of the Indonesian 4,200 kcal/kg GAR – or 3,800 kcal/kg NAR – coal dipped to a 7-month low of $31/mt FOB Kalimantan, according to S&P Global Platts data.
Meanwhile, the delivered price of the seaborne 4,200 kcal/kg GAR into India was at $36.90/mt Wednesday, down 13% since the beginning of the year, as per Platts data.
The lockdown also led to a 7% weekly rise in stockpiles at Indian power plants, with the daily consumption rate declining nearly 9%, according to latest data from India's Central Electricity Authority.
The stockpiles are now sufficient for 28 days of coal burn, up from 24 days on the week, the data showed.
Adding to the worries was a plunging rupee against the US dollar, as the sluggish Indian currency kept import volumes thin.
The rupee closed at 75.62 against the US dollar Thursday, down from about 72 per dollar a month back.
India's Ministry of Shipping could not be immediately reached for a comment.