India’s thermal coal imports in March 2024 rose by 4% m-o-m to 15.48 million tonnes (mnt), as per CoalMint data. Imports rose by 7% to 15.48 mnt in March 2024 compared to 14.41 mnt in March 2023.
Mandate extends operation of imported coal-based power plants until September
Government mandates require power plants fuelled by imported coal to maintain full operational capacity until September, citing increasing electricity demand. The extension of Section 11 of the Electricity Act, initially effective until June, aims to address rising power needs, anticipated to peak at 260 GW during summer, surpassing last year’s 243 GW record. Gas-based power plants may face similar mandates pending ministry review.
While imported coal’s high cost affects plant viability, the ministry seeks to optimise operations amidst surging demand. Additionally, efforts include exploring surplus power utilisation from captive generating stations. Indian Meteorological Department forecasted above-average summer temperatures nationwide, barring select regions.
India’s coal demand rises amid heatwaves
As India gears up for an anticipated increase in heatwave occurrences between April and June, the demand for coal is expected to rise. Indonesia emerges as the primary supplier of seaborne thermal coal to India, recording its highest arrivals in three months with 10.02 mnt in March 2024.
While Australia predominantly trades metallurgical coal with India for steel production, the US has seen a notable uptick in coal exports to India. March witnessed a significant surge, reaching a three-month high of 1.28 mnt, marking a 65% m-o-m increase from February 2024’s 0.78 mnt.
Domestic production
State-run miner Coal India Ltd (CIL) continued its robust performance in terms of coal production in FY 2024. CIL’s production rose by 10% y-o-y to 773.6 mnt in FY 2024 as against 703.2 mnt in FY 2023. The total dispatches have risen by 753.5 mnt as compared to 694.7 mnt in FY’23.
Country-wise imports
India’s thermal coal imports from Indonesia stood at 10.02 mnt in March 2024 as against 9.40 mnt in February 2024, rose by 7% m-o-m. Shipments from South Africa dropped by 9% m-o-m to 1.94 mnt in March 2024 as against 2.13 mnt in February 2024. Meanwhile, in India, Coal India Limited typically boosts production ahead of summer to offset losses during the monsoon. However, some imports may occur prior to monsoon as certain end-users seek to stockpile before rainfall disrupts domestic mining operations.
Despite reduced availability of mid-April-loading cargoes, the Asian thermal coal market experienced sluggish demand. Offer levels declined due to limited interest from India, the largest buyer. As the month progressed, sentiment softened further. Increased domestic production further subdued the market, resulting in fewer inquiries throughout the month.
Shipments from the US surged by 65% m-o-m to 1.28 mnt in March 2024 as against 0.78 mnt in February 2024. However, shipments from Australia dropped by 32% m-o-m to 0.61 mnt in March 2024 as against 0.90 mnt in February 2024. This decline in Australian imports can be attributed to a supply crunch caused by maintenance shutdowns at ports. Specifically, Australia’s Hay Point Port Berth 1 is currently undergoing maintenance shutdown from 10 March 2024, to 10 April 2024.
Moreover, shipments from Russia rose by 21% m-o-m to 0.57 mnt in March 2024 compared to 0.47 mnt in February 2024. However, shipments from Mozambique dropped by 38% m-o-m to 0.53 mnt in March 2024 in the month under review.
Company- wise imports
Adani Enterprises recorded the highest imports at 2.80 mnt, rose by 31% m-o-m as against 2.14 mnt in February 2024. Adani Power dropped by 29% in monthly import volumes at 1.40 mnt followed by JSW Steel at 0.80 mnt. Mohit Minerals recorded a rise of 13% m-o-m to 0.46 mnt in imports during the month under review.
Port-wise imports
Mundra port imported the highest volumes of 2.74 mnt, followed by Krishnapatnam at 1.68 mnt. Kandla and Dhamra ports received cargoes of 1.02 mnt and 0.92 mnt, respectively. Moreover, total coal volumes at Tuticorin and Ennore rose by 21% and 42%, respectively.
Outlook
Thermal coal imports are projected to increase in the near term due to government-mandated ICB power plants operating at full capacity until September. Additionally, coal-based power utilities are mandated to import 6% of their requirements, likely driving imports during peak summer months. However, the upward trend in domestic production may counterbalance import growth, exerting pressure on overall import volumes.
