Regional Coal: India?s coal import up 21%: Research firm
Thursday, January 23 2014 - 07:05 AM WIB
The research firm added that shipments could increase by nearly 12 percent to 170 million tons this year.
Despite having the world?s fifth-largest coal reserves, India is the third largest import of coal after China and Japan due to bureaucratic, environmental and legal delays in adding new mines and expanding existing ones.
Most of the imports come from Indonesia, South Africa, Australia and Canada. India shipped in a total of 126 million tons of power-generating thermal coal, steelmaking coking coal and processed coking coal, or metallurgical coal, in 2012, the firm said as reported by India-based Deccan Herald.
"Rising thermal coal demand is the major reason behind India's surging imports," said Prakash Duvvuri, head of research at OreTeam, which collects data from its representatives at ports, mining regions and companies. The data is not yet publicly available.
The imports were also helped by weak prices. Benchmark thermal coal prices hit their lowest levels in almost four years in September, dropping below $77 a ton mainly due to oversupply in Australia, Indonesia and the United States. In the United states, the shale oil and gas revolution has made more coal available.
Prices have recovered from September's deep trough, but are still not much higher than $82 a ton.
India's thermal coal imports are expected to continue to rise in coming years as it races to increase its per-capita power consumption of about 778 kilowatt-hour (kWh), equivalent to about 30 per cent of the global average of 2,600 kWh. The country's power generation is expected to rise 7 per cent to 975 billion kWh this fiscal year ending March 31, with most of that powered by coal. The federal government has also approved many power projects that would add to the demand.
Though the government does not regularly release data on coal imports, the Coal Ministry has said domestic output could fall short of demand by 155 million tons this fiscal year. That could lead to a 13 percent rise in imports for the year ending March 31 from 137.56 million tons in the year earlier.
More than 80 per cent of India's coal production comes from state-run Coal India (CIL), which has fallen short of its production target for at least the past six years due to difficulties in obtaining environmental approvals, lack of railway access and other issues. Its April-December output of 319.2 million tons was 4 percent less than its target for the period.
CIL, the world's largest coal mining company, estimates a shortage of 350 million tons for 2016-17.
Indonesia would likely be the biggest beneficiary of that shortfall; it already accounts for more than 50 percent of India's coal imports.
Goldman Sachs said on Tuesday that global demand for thermal coal will rise 2.75 per cent a year between 2014 and 2017, driven by Japan, South Korea and emerging markets such as India. (*)