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Wednesday, 31 October 18
INDIA: COAL IMPORTS SURGE ON DOMESTIC SHORT SUPPLY - HINDU
Coal ExcavatorShortage of thermal coal supply in India has pushed imports up to 85 million tonnes (mt) in the first half of the current fiscal compared to 75 mt logged in the same period last year.
 
In fact, imports by non-regulated sectors such as cement, aluminium and steel accounted for about 68 per cent of the incremental thermal coal imports during the period.
 
The rise in imports comes when Coal India has achieved a double-digit production growth of 10.6 per cent in the first half of the fiscal, a feat which has not been seen in recent history. Notwithstanding the healthy production growth, domestic coal supply significantly fell short due to strong recovery in power demand, lower hydropower generation and healthy growth in production levels from non-regulated consuming sectors.
 
As on September 30, the 22 non-pithead power plants had less than 7 days of coal stock. During the last monsoon season, domestic coal production slowed to 3.8 per cent and 3.2 per cent in September and August, against 10.6 per cent in July and 13.2 per cent in June, leading to coal stocks at power plants deteriorating from 21 mt in July to 15.8 mt in September.
 
Jayanta Roy, Senior Vice-President, ICRA, said given the fall in domestic coal availability and the healthy demand from coal- consuming sectors, spot e-auction premia reached 102 per cent in September, surpassing the level of 95 per cent logged in October 2017, when coal stocks at power plants were at their lowest levels.
 
With Coal India’s pithead stock running critically low at about 18.4 mt as on September 30 against a higher level of 55.5 mt as on March 31 the central miner’s ability to ramp up production would be critical to close the gap between coal demand and supply.
 
“Apart from rising import dependence, a steep increase of over 25 per cent in seaborne thermal coal prices during the current fiscal, a sharp depreciation of the rupee and rising spot e-auction coal prices are estimated to have led to a 20-34 per cent rise in coal costs in last seven months for companies depending on e-auction and imported coal,” said Roy.
Source: The Hindu Business Line


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