India imported about 15.2 MnT of non-coking coal in July’15 against 14.5 MnT in previous month. Continuously falling prices of non-coking grades have enticed Indian buyers to buy imported coal amid monsoon.
Amid continues growth in coal production by CIL Y-o-Y, the growing coal demand in India has caused increase in coal imports. India, in FY15, had imported about 58.2 MnT of non-coking coal (Apr-July). Whereas, it has imported about 62.2 MnT of non-coking coal during the same period in FY16, registering a growth of about 7%. The country imported about 15.2 MnT of non-coking coal in July’16.
Source- SteelMint Research
Major Reasons for Rise in Coal Import in India
1. Growing Coal Demand in India
According to the latest release by Indian coal ministry, annual coal demand for FY16 has grown up to 910 MnT. However, centre has planned about 700 MnT of coal production from indigenous sources. Due to lack of infrastructure required for production and extraction of the left quantity, there is no option left other than to import 210 MnT to fulfill the coal demand.
2. Increase in Energy Consumption
With a growth of about 7% in India’s energy consumption in FY15, both import and production of coal in India has experienced pressure, as coal serves as the dominant fuel in India for producing energy. It contributes about 56.5% total energy production (BP Statistical Review 2015), a probable reason for growing import.
3.Continuous Falling Prices of Dry Fuel in Global Market
China, the major buyer of coal, has shown substantially lower interest in imports
on grounds of steel production cut and sufficient stock availability. This has led to oversupply of material with sluggish demand in global market, ultimately resulting in fall in prices on sellers’ front.
4.Lower Domestic Production than Targeted
Continuous increase in demand of dry fuel on power players’ front in India, along with failure in achieving coal production target by the only source of domestic coal has resulted in increase in import.
Mundra port received about 2.7 MnT of non-coking coal in July’15, highest quantity among all Major Indian ports. Adani Enterprise imported highest quantity of Non-coking grade coal ie about 2 MnT in the month. Indonesian coal dominated the import and was assessed at 10.5 MnT in July’15 against 9.2 MnT in the previous month.
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