Q1 of FY16 has witnessed a growth of 9% in total coal import against Q1 of the last fiscal. The country imported about 61 MnT of coal in Q1 FY16 .
Amid centres’s continuous efforts to fulfill nation’s dry fuel demand by domestic production, India has imported 5.3 MnT more coal in first quarter of the fiscal compared to Q1 FY15. World’s third largest coal buyer in international market, India had imported about 55.9 MnT of coal in Q1 FY15.
Non-coking coal import registered growth of about 7% in Q1 FY16 against same period in FY15. Also, coking coal imports were up by about 8%.
Qty in MnT
Source- SteelMint Research
Major Reasons for Rise in Coal Import in India
1. 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.
2. 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. Coal India produced about 121.3 MnT coal in Q1 FY16.
3. Dropping Vessel Freight
Falling prices of crude oil in last one year resulted in decline of sea freight rates of bulk vessels by about 30-40%. Freight from all major coal exporters to India namely, Indonesia, Australia and South Africa has declined by 28-30% for Q1 FY16 against the first quarter of last fiscal.
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