Indian power plants have increased sourcing of imported coal, after witnessing a steady decline for the past five months.
Responding to the government’s call to avert a looming power crisis, the plants had imported 1.82 million tonnes (mn t) of coal in Oct’21, registering substantial growth of 68% m-o-m from the lows of 1.08 mn t in Aug’21. However, the volume was 61% lower y-o-y compared to 4.64 mn t in Oct’20.
Soaring global coal prices have been a major reason for lower imports this year, which compelled several import-based plants to shut operations.
In turn, this put more pressure on domestic coal supplies to meet the shortfall. The situation got worse when power demand increased, resulting in a drastic fall in inventory levels.
Consequently, the government had to make a U-turn on its previous stance of reducing imports, by asking the power plants to import in order to tide over the situation.
Notwithstanding the rise in monthly imports in Oct’21, total imports by power plants decreased 32% y-o-y to 18.14 mn t in Apr-Oct’21 against 26.78 mn t in Apr-Oct’20.
Private plants show more intent
Central-run plants saw a four-fold jump in imports on a monthly basis to 0.13 mn t in October, but these accounted for a mere 7% in the overall volume.
Besides, there was lesser appetite for imports from the state-run plants for blending purposes as they satisfied their coal demand through domestic supplies. Notably, no imports were made by these plants for the fifth successive month.
In fact, Gujarat’s state-run Sikka power plant, designed to run on imports, had also reported nil imports during the month.
Source: Coal ministry | Quantity in mn t
On the other hand, private power plants, especially those designed to run on imported coal, were more active. Notably, Adani Power’s Mundra plant alone accounted for one-fourth of the total imports during the month.
Similar response was seen for blending from the private players whose imports rose to a four-month high of 0.52 mn t during Oct’21.
Still, several plants are shying away from imports due to high prices. But, with correction in prices, the volume is expected to rise as there remains a strong restocking demand, going forward.
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