Demonetization Likely to Further Bring Down Coal Imports in Dec’16

Demonetarization is expected to play a major role in lowering imports in Dec’16, a section of market participants speculates.

Coal imports into India during Nov’16 were lower by 16% to 14.11 MnT from the imports of 16.87 MnT in Nov’15. Out of the 14.11 MnT of total coal imports during the last month, 9.3 MnT was Non Coking Coal, 2.87 MnT was Coking Coal, 0.96 MnT was Petcoke, 0.16 MnT was Anthracite Coal, 0.40 MnT was PCI and 0.38 MnT was Met Coke.

During Dec’16, prevalence of high coal prices in international markets and demonetization lowering liquidity among Indian buyers are expected to result in coal imports getting lower in the country.

The Government of India has decided to mandate all public sector power companies in the country to stop importing coal from the onset of FY18.

On the positive side, the decline imports will save outflow of valuable foreign exchange.