The Wall Street Journal’s conclusions…
Oil markets have so far…
It was to be expected. India’s coal imports in September zoomed up by 19% to 16 million tons as compared to a year ago, no thanks to low output from the state-run Coal India Ltd (CIL), according to data by online trader mjunction.
India’s imports of all types of coal rose 18.47% to 110.15 million tons (mt) in April-September, as against 92.98 mt imported during the same period in 2013-14. A report on moneycontrol.com said:
• Imports of steam coal surged 20.69% to 87.09 mt during the first six months of 2014-15 from 72.16 MT recorded in the same period in 2013-14.
• Imports of petroleum coke went up 72.22% to 2.17 mt from 1.26 mt in the first half of 2013-14.
• Imports of coking coal increased by 7.13% to 18.32 mt from 17.10 mt in the first half of 2013-14.
• Imports of metallurgical coke fell by 9.16% to 1.19 mt from 1.31 mt last year in the review period.
Even for the month of September alone, imports of all kinds of coal were 16.04 mt, 19.26% higher as compared to 13.45 mt imported in September 2014, though slightly down from 16.12 mt imported in August 2014.
An India Ratings report earlier said India had imported 171 mt of coal at US $16.41 billion in 2013-14 as against 145 mt at US $17.01 billion in the previous fiscal, clearly underlining the fact that India’s dependence on foreign coal is increasing.
India’s hunger for coal continues unabated, even though it sits on what many estimate to be the world’s third largest coal deposits. Inconsistent mining policies, red-tapism and a legal verdict that overturned almost all previous mining licenses for coal blocks has forced Indian companies to look to foreign shores to fulfill their coal needs.
Part of the reason for the September imports going up was low international prices of coal, making it an attractive proposition for Indian consumers.
The situation in India vis a vis coal supply is dire. One estimate puts about a week’s supply of coal remaining in around 60 of the nation’s 103 power plants. This is the worst the country has seen in six years.
CIL, which is also the world’s largest miner of the fuel, accounts for around 80% of the country’s total coal production but the state-owned firm has not been able to keep up with the rise in demand for coal, especially in the power sector.
Its April-September production fell short by over 9 million tons of its targeted 220.11 million tons.
Now, to add to the woes, the Government of India has asked CIL to cancel the auction of another 3 coal blocks that were put under the hammer. Around 44 parties had shown interest in them and 2 had bid. The official reason for the cancellation is not known yet.
By the way things are moving on the coal front, Glencore, the biggest trader, has predicted that Indian imports will go up to 180 mt in 2015 and then to 300 mt by 2020. The country may soon overtake China as the biggest importer of coal it said, according to this report in the DNA.
by Sohrab Darabshaw
(Source: www.agmetalminer.com )
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