India is one of the world’s largest consumers of coal and coal is among the top five commodities imported by India. 2018 recorded the fastest growth in thermal coal imports since 2014, as it rose by 19% to around 170 million tonnes, based on rising demands from the cement and small and medium-scale industries in India. As of December 2018, the value of all coal imports was 1.72 trillion Indian rupees or $24.25 billion i.e. 28.7% higher than 2017.
The increased demand was also fueled by restrictions imposed upon the use of petroleum coke (a dirtier alternative to coal) in some parts of the country. The consumption of petroleum coke fell by about 15% in 2018, according to government data from the coal and trade ministries. The import of coking coal, mainly used for the manufacture of steel, has risen the most since 2015, with a 14% increase since 2017, at around 52 million tonnes in 2018.
37.5% of all thermal coal imports were handled by the ports of Kandla, Mundra and Krishnapatnam. The increase in coal imports has come after two consecutive years of decline and efforts by PM Narendra Modi’s government to cut imports in order to reduce the country’s trade deficits. India’s trade gap has been negatively impacting the valuation of the Indian Rupee. In 2018, it was the worst performing Asian currency.
Country-wise share of Indian thermal coal imports
While the Indian trade deficit might have increased as a result of the rising coal imports, this boom has benefitted international miners like the Australian Whitehaven Coal, Indonesian Adaro Energy and American Peabody Energy Corp. American thermal coal burns better in comparison to Indonesian coal and in 2018, the imports of the former almost doubled to 12.46 million tonnes.
If the prices of coal reach the peak levels of 2018, American coal might become popular in India again. However, Indian buyers prefer cheaper varieties of coal (due to lower freight costs), from countries like Indonesia, and this trend is likely to continue in 2019. According to the Adani Group, which handles about 33% of India’s imported coal had predicted in 2017, a reasonable rise in imports until the fiscal year 2021. This would be a result of the challenges vis-à-vis rail transportation, affecting the Indian domestic coal industry.
For international miners, India will become a key market in 2019, given lowered Chinese demand due to the country’s “war on pollution.” However, increase in the consumption of coal is bound to neutralize the progress made by India in terms of being one of the economies that is dominating the global landscape of renewable energy, especially solar energy. The 2018 Climatescope Report did highlight the challenges that India would face in energy transition, especially in terms of existing coal-fired plants and expansion of coal capacity.
India Outbound
January 29, 2019
source https://indiaoutbound.org/boom-in-indian-thermal-coal-imports/
No comments:
Post a Comment