Thermal coal imports surged 23% y-o-y to a two-year high in January-March

India’s thermal coal imports in the first quarter of 2024 calendar year rose to its highest in the last two years as the world’s thirdlargest energy consumer prepares to meet the peak power demand during April to June.

According to data from energy intelligence firm Kpler, India’s import of thermal coal, largely consumed by the power sector, rose 23 per cent yoy to 42.95 million tonnes (mt) during JanuaryMarch this year from 34.85 mt in the same quarter of 2023.

SUMMER RUSH

However, imports during the first three months in 2024 were lower by 19 per cent compared to the record 52.85 mt coal imported in OctoberDecember 2023. Kpler’s Lead Major Dry Bulks Analyst, Alexis Ellender told businessline “India’s thermal coal imports were in line with our expectations in March as they climbed by 1.60 mt yoy to a threemonth high of 15.12 mt. This slower pace of annual growth compared to late 2023 and JanuaryFebruary 2024 was primarily due to a higher base.”

Increased imports and domestic production growth means the country is entering the peak summer demand season with significantly larger thermal coal stockpiles than in recent years, he added.

At 51 mt on March 31, stocks at Central Electricity Authority monitored plants were up by more than 13 mt yoy and close to double the same point in 2022. “As a consequence, we do not expect a surge in summer imports of the type seen in 2022 however, we do anticipate steady annual growth in shipments through the second quarter and into the third quarter.

RISING DEMAND

The potential for weak hydropower generation presents upside risk to forecasts however, on the downside, if coal burn underperforms expectations, then high power plant stocks could become a weight on import demand,” Ellender explained.

A senior government official said that imports will be higher in FY24 as electricity consumption is inching up coupled with Power Ministry’s March 4 advisory to TPPs to continue importing the fuel for blending at 6 per cent till June 2024.

Government and analysts expect power demand to grow at 67 per cent yoy on the back of rising consumption from industries and households.

Keeping thermal power plants well stocked is critical as the Meteorological Department ( expects extreme heat conditions during April to June with Central and Western India likely to face the worst impact.

As expected, the Power Ministry directed all the importedcoal based power plants to continue operating at full capacity till September 2024.