With the summer season setting in, consumption of power is also rising. Chinese power producers have begun stockpiling coal to meet the incremental consumption during the peak power demand in summer season. Demand for Thermal coal has, thus, increased in that country due to stockpiling, and that has led to surge in import.
Chinese customs data shows that coal import went up by 15.6% in Mar’16 over the same month in the previous year. According to the data, 19.69 MnT of coal was imported into the country in 3rd month of the current year.
The moot question arises in this context is – will rising seasonal import trigger price upswing in international markets, and eventually impact the Indian market? The answer is, however, in the negative.
Experts believe that the seasonal spike in import, expected to last upto May’16, will not be able to bring about any change in price trend as import will again fall after May’16, when power plants will cut purchases. The country is already sustaining oversupply and inactive demand. The oversupply has already weakened affinity for import, which had fallen by around 29% during 2015 against the previous year.
Besides, export of coal by the country is also not expected as Chinese coal is relatively costly than that in the prominent international markets.
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