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India’s Thermal Coal Demand Expected to increase 3% YoY in 2024-2025 Fiscal Year

Although industry has become India’s main coal-consuming industry with rapid economic growth, the booming development of India’s coal industry still relies mainly on surging demand for electricity.

According to assessment data recently released by BigMint, the total demand for non-coking coal in India is expected to reach 1.128 billion tons in the 2024-25 fiscal year, an increase of approximately 3% from 1.098 billion tons in the 2023-24 fiscal year.

Coal for power generation is the main coal consumption area in India, accounting for approximately 64% of total consumption, followed by the steel industry (mainly coking coal, accounting for 8%) and the cement industry (accounting for 5%). In addition, papermaking, textiles, fertilizers, railways, national defense and other small and medium-sized enterprises also have coal needs.

According to data from India’s Ministry of Coal, coal will account for about 73% of India’s total power generation during 2022-23, hydropower, nuclear power and other renewable energy power generation will account for 25%, and natural gas will account for 1%.

India’s non-coking coal production is expected to reach 900 million tons in the 2023-24 fiscal year, and is expected to grow by a further 9% to 980 million tons in the next fiscal year.

Demand prospects by industry
Coal-fired power plants will become the main consumer industry of thermal coal in India, with consumption expected to reach 860 million tons in 2024-25, up from 845 million tons in the 2023-24 fiscal year. Among them, the total consumption of self-owned power plants in the 2024-25 fiscal year will reach approximately 158 million tons, an increase from 150 million tons in this fiscal year.

In the 2024-25 fiscal year, coal consumption in the Indian cement industry is approximately 46 million tons, while coal consumption in the sponge iron industry is expected to increase from 50 million tons in the 2023-24 fiscal year to 54 million tons.

Non-coking coal consumption in other Indian industries such as fertilizers and papermaking is expected to be 10 million tons by fiscal year 2024-25, a slight increase from fiscal year 2023-24.

In terms of source countries, in the 2023-24 fiscal year, 60% of India’s non-coking coal imports are expected to come from Indonesia; South African coal imports are about 30 million tons, accounting for about 16% of India’s total non-coking coal imports; Australian coal Import volume was 15 million tons, accounting for 8%.

Import expectations
Some foreign media recently stated that the Indian power industry’s coal demand of 821 million tons for this fiscal year has been met. At the same time, in order to achieve India’s goal of “self-sufficiency” in coal use, since this fiscal year, India’s imported coal for mixed power generation has decreased from 30.8 million tons in the previous fiscal year to 22.2 million tons.

In order to promote the Indian government’s policy of replacing imported coal, India’s non-coking coal imports are expected to drop by about 19% year-on-year in the 2024-25 fiscal year, from 185 million tons in the 2023-24 fiscal year to 150 million tons.

Among these imported non-coking coals, self-owned power plants, domestic coal-fired power plants and the cement industry are the main consumer groups, accounting for about two-thirds of non-coking coal imports. The remaining one-third is supplied to coastal areas designed to use imported coal. of coal power plants.

The Indian government has set a goal to completely stop the import of coal for power generation by the 2025-26 fiscal year. At present, the Ministry of Coal India is actively cooperating with the railway department to ensure sufficient coal transportation capacity.

Source: Sxcoal