We're finally seeing the first projections on India's surging thermal coal demand. And the emerging numbers are massive.
As I've discussed, India's coal sector is in crisis. With stalling domestic production leading to rolling blackouts of late--as many of the country's coal-fired power plants struggle to find supply.
As of September 23, a full 35% of the country's coal-powered plants were running at "super-critical" coal supply levels. With less than 4 days of inventory on hand.
Related: Supreme Court Ruling Deals Blow To Indian Coal Sector
And according to a few high-profile analysts this week, that's going to lead to a big jump in imports to fill the gap.
Local coal analysts OreTeam released a forecast predicting that coal imports could leap to 210 million tonnes in the fiscal year 2015/16 (which will begin April 1, 2015).
That would be a significant rise. Up 25%--or over 40 million tonnes--from the 168.4 million tonnes of coal India imported during the last fiscal year.
And some observers believe the jump could be even bigger. Including the local Indian arm of international analytics giants Fitch.
The group's chief economist in India was quoted this week by local press as saying that coal imports could hit 230 million tonnes. Which would be a 37% rise from last year's levels--or an increase of over 60 million tonnes in shipments coming into the country.
The import market is reportedly getting a lot more active the last week. After a landmark court ruling that could set the local coal mining sector back even further than it already is.
Related: This Brand New Coal-Producing Nation to Start 2015
Indian courts ruled that 214 coal licenses given out over the past two decades were allocated unfairly. Judges ordered the blocks returned to the government--so that they can be redistributed under proper protocols.
That's going to push back any production from these licenses by years. Meaning supply is going to be even tighter here than most analysts were predicting.
This is a situation that looks like it's on the verge of exploding. Watch India's monthly import figures--as well as prices and transactions in potential supplying nations like Indonesia and South Africa.
Here's to putting up big numbers,
Dave Forest
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Dave is Managing Geologist of the Pierce Points Daily E-Letter. More